Updated from 9:45 a.m. EDTCHARLOTTE, N.C. -- The Obama administration appears ready to disregard years of precedent in bankruptcy and taxation law as it remakes the U.S. auto industry. The latest example is the General Motors ( GMGMQ) bankruptcy, where the intent is to have a newly created GM assume the benefit of tax losses at the old GM. The problem, says Jeffrey Coyne, senior lecturing fellow at the Duke University School of Law and a management consultant who specializes in reorganizing troubled companies, is that tax losses can be passed on only to companies whose owners controlled at least 50% of the predecessor company. Since the start of 2005, General Motors has reported losses of about $87 billion. "You can't form new GM, which has never transacted business before, and sell the assets (of existing GM) and then sell the net tax benefit to the new company," Coyne says. "And as far as I can tell, the NOL is not a saleable asset." An NOL, or net operating loss, can be used as a tax loss carry forward, an accounting technique that allows it to be applied to future profits to reduce tax liability. The administration does not share Coyne's view. On a briefing with reporters on May 31, the night before GM filed for bankruptcy protection, a senior administration official declared: "The NOL would be transferred to the new company." The administration's position is laid out in a paragraph buried in the bankruptcy filing. "The outstanding balance of deferred tax assets and NOL carry forwards at NewCo reflect the effects of restructuring and subsequent 363 Sale, including the expected cancellation of debt income," the filing says, adding "This analysis assumes that utilization of NewCo's non-U.S. tax attributes will not be limited in any way by the Company's reorganization or other restructuring events."