Case | HBS Case Collection | February 2010

Saginaw Parts Co. and the General Motors Corp. Credit Default Swap

by William E. Fruhan

Abstract

This two-page case demonstrates how to unbundle the cost of credit extensions from product prices by observing the price of a credit default swap. It also explores how credit default swaps work, and how trade creditors are treated under U.S. bankruptcy law. Finally it provides a quick overview of the bankruptcy of General Motors Corp.

Keywords: Trade; Credit; Insolvency and Bankruptcy; Credit Derivatives and Swaps; Laws and Statutes; Risk Management; Auto Industry; United States;

Citation:

Fruhan, William E. "Saginaw Parts Co. and the General Motors Corp. Credit Default Swap." Harvard Business School Case 210-056, February 2010.