Michigan's Attorney General, Mike Cox, has sent letters to the CEOs at both companies to ask that, if they file for bankruptcy, they do it in Michigan. Why? Because that would be more convenient to the creditors that GM and Chrysler have in Michigan.
According to The Detroit Free Press, both automakers owe funds to state coffers from the Michigan Business and Single Business Tax obligations to environmental regulations, among others. If GM and Chrysler declare bankruptcy in some other state, the burden will be on state reps to travel to attend proceedings, and that "would undoubtedly lead to unjust bills." What remains to be seen, though, is how much say either GM or Chrysler will have in where they will have to declare bankruptcy – if such movements become necessary.
[Source: Detroit Free Press]