Posted on 05/11/2009 6:53:19 AM PDT by reaganaut1
...
Pulling a trick from the hedge-fund playbook, the government used its leverage as the sole willing lender to Chrysler, either in bankruptcy court or out, to extract deep concessions from some of the country's biggest banks.
The results of these hardball tactics were on display Friday, as the last resisters of a deal to slash the value of Chrysler debt abandoned their effort to fight it in bankruptcy court. That raised the chances for a relatively swift transit through Chapter 11, producing a new Chrysler 55%-owned by a trust for union retirees, 35% by Fiat SpA -- which hasn't even been a Chrysler creditor -- and not at all by the senior secured lenders.
That conclusion would upend a longstanding tradition concerning rights in a bankruptcy: Senior secured lenders usually get paid in full before lower-priority creditors get anything. Not this time.
The White House's role in restructuring Chrysler has sent a shudder through the community of lawyers and lenders in the field of bankruptcy and corporate workouts. Critics complain that the administration has violated a bedrock principle of American capitalism and unfairly demonized financial firms that are vital to the functioning of the economy and its eventual recovery.
Administration officials reply that the Chrysler crisis required bold action. While Chrysler's suppliers, dealers and unionized workers are critical to its survival -- and so is Fiat, which will contribute high-efficiency engines and foreign distribution -- the creditors were expendable.
"You don't need banks and bondholders to make cars," said one administration official.
The administration could exert such leverage because it was convinced big banks were too tarnished in the public eye to put up a fight. They risked being blamed for Chrysler's demise.
(Excerpt) Read more at online.wsj.com ...
If Obama had demanded equal concessions from the UAW, what was it going to do, go on strike? The country could survive just fine without Chrysler. This was a naked political payoff by a Chicago thug.
Call it what it is - pure fascism.
Boycott Chrysler products.
The UAW paid for Obama’s ‘hope’.
Anyone think a US company will be able to raise any money? Plenty of workers.
We'll see about that.
Stupid MSM. They can't even do the research to get the story right.
That’s a pretty easy one.
Been doing that for over 43 years.
Now, I may have to start boycotting GM products and go back to Toyota.
It is amazing the level of ignorance displayed by the administration.
And the number of laws they are breaking.
Exactly right.
For decades, I've had Leftists tell me that Hitler was a right-wing extremist -- afterall, he had a lot of support from German industrialists! Why would powerful industrialists support Hitler, if Hitler was actually a socialist???
In reality, it's not that hard to figure out the economics of fascism.
We are in for a rough ride, I think.
It is amazing the level of ignorance displayed by the administration.
And the number of laws they are breaking.”
It’s not ignorance. This is a deliberate, socialist blitzkrieg on America. And it is being executed exactly according to plan.
As for breaking the laws, the Rule of Law is dead. It is clear that our government no longer feels itself bound by any laws or restraints of any kind. As you would have in a fascist regime.
“It is clear that our government no longer feels itself bound by any laws or restraints of any kind. “
That has been true for a while now - it has just become more obvious to the casual observer recently.
“On the 73rd day I will rest.”
I am at a loss for words.
“Now, I may have to start boycotting GM products and go back to Toyota.”
I have been since 1985, Honda and more recently, BMW are my vehicles of choice.
The Obama Administration took Chryslers slogan “Just Ram It” to heart and rammed it up the investors rears.
“Boycott Chrysler products.”
Absolutely. Given the way this was handled, I don’t think I’d drive one if someone gave it to me for free. And, I will be avoiding rental car agencies that use them. If there were a national appeal for money to help retirees that are dependent upon pension money from Chrysler, and it was voluntary, I would certainly give to help these people. On the other hand, having the bedrock principles of our economy thrown away and manipulated so that a union can have ownership of a company that they helped to destroy economically is disgusting, and I will not under any circumstances buy a Fiat or Chrysler car. My guess is that if they survive at all it will be because they sell to Europe and other countries.
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