[tobyhill]

“And as part of the deal, the Energy Department agreed that if the company went bust, private investors could recoup their losses before the government.”

OMG! Who in the Energy Dept. thinks they can bypass a bankruptcy judge and screw the taxpayers?

[In Maryland]

"OMG! Who in the Energy Dept. thinks they can bypass a bankruptcy judge and screw the taxpayers?

I'm not sure, but I bet they are using consultants from the group that screwed over the Chrysler bond holders.

[dan on the right]

It sounds like there was a recent $75 million recapitalization from the investors and part of their deal was that their new money would be senior (regarding the collateral) to the existing lenders (whom we guaranteed).

Further, sounds like the lender - more important the guarantor (that would be the US Gov’t = us) agreed to the subordination to get the new cash in the company. Unless we agreed in writing, we would still be senior.

Not uncommon, actually, for “new money” investors to be senior to existing creditors. Can't believe we agreed to it, however. How do you blow through $500 million in such a short time (assuming it was all spent - details are not really clear yet).