Monday, December 08, 2008

Creating Real Accountability for Auto Company Loans

One of my concerns with the bailout money is that there doesn't seem to be any real accountability for the government getting the money back. Here's my solution for creating much more accountability.

If I were in charge of loaning money to the auto companies, I would do it as a recourse loan to the C-level officers and directors of the auto companies. A recourse loan is one in which the undersigners are personally liable for the entire amount if the borrower defaults.

Since the CEOs state they will payback the loan, I'd like the C-level executives and directors of the companies to back up their confidence by putting all their personal assets at risk. I think there would be much more reality and prudence in bailout money requests if the company executives and directors were personally liable for the loans.

Perhaps, in such a case, the auto companies would be more engaged in generating other viable options to resolve their business and financial issues.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2008 Achievement Catalyst, LLC

No comments: