After weeks of skirting the potential of bankruptcy filings by GM and Chrysler, the Obama administration is now actively looking for potential debtor-in-possession financing in the private sector that would be required to get the companies through any bankruptcy reorganization process. Automotive News reports:
 

The Obama administration confirmed today that outside advisers are looking into debtor-in-possession financing for General Motors and Chrysler LLC in case one or both need to reorganize in bankruptcy…

The Wall Street Journal reported today that outside firms advising the Treasury Department are trying to line up as much as $40 billion — a record amount — to help the automakers through reorganization in bankruptcy.

The paper said banks that are receiving government aid could be the source of loans for automakers during reorganization.

The automakers have long argued that such financing would be impossible to secure given the current conditions in the credit markets. The administration source did warn against reading too much into this matter, saying the search for bankruptcy financing was just “one part of weighing options so that educated decisions can be made.”