Capitalism fires back at the Obama Administration *Updated*

[K1052]

It's being reported that the debt holders still contesting the deal now only amount to around $300M of Chrysler's $6.9B secured debt.

That's down from the $1B that were holding back before and the deal certainly hasn't gotten any sweeter. You've got to wonder if those particular funds got their CDS triggered and are scurrying away from the limelight now that the holdouts are legally obligated to reveal their identities.

 

[Thump553]

Originally posted by: senseamp
I actually disagree with Obama on this one. I think Chrysler should be allowed to fail and duke it out with their creditors.

And your idea differs from a bankruptcy filing in what way? And what do you disagree with Obama about-interpretation of bankruptcy statutes? Which particular statutes?

It sure appears to me that the so-called (anonymous) Non-TARP lenders are really just angling for their own sweetheart payoff/bailout and all this bullying talk is pure hyperbole. Believe me, thin skinned people don't last in the lending field very long and this group is acting like a bunch of whining emos.

 

[GuitarDaddy]

Originally posted by: eskimospy

Fern
Considering that the market value of this debt has already been propped up for months with previous government bailouts and that creditors have been WILDLY overestimating the value of the debt that they hold in general for quite a long time, their arguments seem mighty thin to me. That's for the courts to decide though.

Like most people you don't seem to understand bankruptcy law. The definition of a secured lender is one who is secured by "pledged assets" not the worth or profitability of the company. When GM issued these bonds they pledged specific pysical assets (factory's, inventories, buildings, receivables, etc..) assigned to each bond as collateral, just like your car is collateral for a car note. Say for instance 100mil in bonds is collateralized by a building, by rule of law the holders of those particular bonds have the right to the liquidation sale value of that building regardless if Ch7 or Ch11 before any other creditors of the company are paid. In effect the admin. is trying to covince the bondholders that that building is only worth 20mil if liquidated when the market value even in this economy is at least 70mil.

That also explains why some of the holdouts are so adament, they probaly own bonds assigned to some of GM's most saleable assets like office buildings as opposed to older plants and less saleable assets.