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Unions WON in scrapping the rule of law, but in the long run?
Fund Managers Burned by Obama Now Say They Are Wary (Update3) - Bloomberg.com
Fund Managers Burned by Obama Now Say They Are Wary (Update3) - Bloomberg.com
Fund Managers Burned by Obama Now Say They Are Wary (Update3)
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By Caroline Salas
May 20 (Bloomberg) -- Hedge fund manager George Schultze says he may avoid lending to any more unionized companies after being burned by President Barack Obama in Chrysler LLCs bankruptcy.
Obama put Chrysler under court protection on April 30 after lenders balked at a proposal giving them about 29 cents on the dollar for their $6.9 billion in debt. The investors said the presidents plan favored a union retiree medical fund whose claims ranked behind them for repayment. It was offered a 55 percent equity stake in the automaker.
Pacific Investment Management Co., Barclays Capital and Fridson Investment Advisors have joined Schultze Asset Management LLC in saying lenders may be unwilling to back unionized companies with underfunded pension and medical obligations, such as airlines and auto-industry suppliers, because Chryslers creditors failed to block Obamas move. The reluctance may put additional pressure on borrowers seeking capital in the worst financial crisis since the Great Depression...