Turning to Chapter 11 of BP's Story

Matt Simmons on the future of BP:

They have about a month before they declare Chapter 11. They're going to run out of cash from lawsuits, cleanup and other expenses. One really smart thing that Obama did was about three weeks ago he forced BP CEO Tony Hayward to put in writing that BP would pay for every dollar of the cleanup. But there isn't enough money in the world to clean up the Gulf of Mexico. Once BP realizes the extent of this my guess is that they'll panic and go into Chapter 11.

I suspect he is right. I am not sure how BP can weather this short of entering bankruptcy protection. Of course, how its liabilities will ever be meted out in an equitable fashion is hard to say. Perhaps an organization ought to be formed to represent all the individuals as a class and seek to obtain a large ownership stake in BP's assets.

Given how the Obama administration (unfairly in my estimation) forced GM and Chrysler into specially packaged bankruptcies and handed off a large chunk of each to the union pension funds instead of the rightful preferred stock holders, I am puzzled that they haven't already jumped in here where such a handoff appears more conscionable. When a company severely damages the economies of numerous states, I'm not sure it should still be setting its own course.