True. But the heirarchy of creditors (secured) lines up after debts to IRS, State, & local governments. Tax burdens come first.
The government debt owed is not a tax burden and, therefore, we tend to put the government alongside everyone else in this quagmire.
I truly wonder what changes we might see in the bankruptcy handling of a corporation infused with Federal government money seeking 'safe haven' in a Federal court headed by a Federal judge... and the outcome of protecting senior secured creditors at the expense of the United States of America.
This should be interesting. I don't think it will follow the path we have seen in the past. It will be very difficult to decree that the United States of America should take its losses, lick its wounds, and act like a good sport. A subsidized (as it turns out) corporation IMHO has a duty to protect the interests of the government. Likewise, the bankruptcy court has that same duty. This is why I think the outcome might be a tad different than we imagine.
Maybe, maybe not. But at least be open that it might not be "textbook".
