Chrysler bankrupt

[editec]

The Obama administration's behavior in the Chrysler bankruptcy is a profound challenge to the rule of law. Secured creditors -- entitled to first priority payment under the "absolute priority rule" -- have been browbeaten by an American president into accepting only 30 cents on the dollar of their claims. Meanwhile, the United Auto Workers union, holding junior creditor claims, will get about 50 cents on the dollar.

Canard ALERT.

Mostly the UAW is trading their pension promises (whose values are not easily determined but would have been enormous if they'd been kept) for stock ownership.

The stock is worthless (unless the plan works) so really, the UAW is trading pension promises (which would have become worthless if the company went down) for stocks in a company with ZERO present market value.

Essantially the UAW pension is trading in something of dubious value for something of dubious value.

Sounds fair to me.

 

[Annie]

The Obama administration's behavior in the Chrysler bankruptcy is a profound challenge to the rule of law. Secured creditors -- entitled to first priority payment under the "absolute priority rule" -- have been browbeaten by an American president into accepting only 30 cents on the dollar of their claims. Meanwhile, the United Auto Workers union, holding junior creditor claims, will get about 50 cents on the dollar.

Canard ALERT.

Mostly the UAW is trading their pension promises (whose values are not easily determined but would have been enormous if they'd been kept) for stock ownership.

The stock is worthless (unless the plan works) so really, the UAW is trading pension promises (which would have become worthless if the company went down) for stocks in a company with ZERO present market value.

Essantially the UAW pension is trading in something of dubious value for something of dubious value.

Sounds fair to me.

When the government is forcing those who had secured the debts to take less than those who didn't, they're messing with the underpinnings of our economy.

 

[Toro]

Obama singling out hedge funds for criticism during the Chrysler bankruptcy was extraordinarily stupid.

Hedge-fund managers are showing rare public outrage against the Obama administration, saying that it has wrongly rebuked investors necessary to salving the financial crisis.

Fund managers caught in a dispute over Chrysler LLC with the government "generally have been anonymous for fear of going on the record against a powerful president," said one recent letter from Cliff Asness, who runs the $20 billion asset-management firm AQR Capital.

Mr. Asness's remarks capture what many fund managers say they feel but would never say publicly: They have been disappointed by the Obama administration, left detached from a leader to whose party they gave 70% of their overall campaign donations during the 2008 election, according to data compiled by the Center for Responsive Politics. That has made them say they are less willing to support government initiatives aimed at luring private capital back into the economy.

Hedge Funds Are Piqued by White House - WSJ.com

Many of these programs that the government has created need large pools of capital such as hedge funds to participate. Yet, many won't because they believe they will be screwed by the government if it the government thinks it is politically expedient to screw them. And I don't blame them one bit.

 

[Zoomie1980]

The Obama administration's behavior in the Chrysler bankruptcy is a profound challenge to the rule of law. Secured creditors -- entitled to first priority payment under the "absolute priority rule" -- have been browbeaten by an American president into accepting only 30 cents on the dollar of their claims. Meanwhile, the United Auto Workers union, holding junior creditor claims, will get about 50 cents on the dollar.

Canard ALERT.

Mostly the UAW is trading their pension promises (whose values are not easily determined but would have been enormous if they'd been kept) for stock ownership.

The stock is worthless (unless the plan works) so really, the UAW is trading pension promises (which would have become worthless if the company went down) for stocks in a company with ZERO present market value.

Essantially the UAW pension is trading in something of dubious value for something of dubious value.

Sounds fair to me.

It does one very odd thing....it makes the UAW (and it's Chrysler members), actual and real stakeholders. The viability of their pension is now DIRECTLY tied to the performance and profitability of the company. So if they once again go back to insisting on the kinds of compensation packages they used to have, after Chrysler recovers, they'd be cutting their own throat.

 

[xotoxi]

Where is Lee Iacocca when we need him?