Capitalism fires back at the Obama Administration *Updated*

[Specop 007]

Seems the Obama Administration is trying to strip the secured creditors from any Chrysler assets through TARP powers. They will then in turn reassign these assets as they see fit to democratic insiders and unions.

Well, the secured creditors who havent had TARP shoved down their throat at gunpoint seem to disagree with this.

And now it goes to court. This will really dictate how lending happens for ages. Either banks really have no legal rights to assets and the government can come in at any time or creditors will have rights to assets.

Any people complained about how badly Bush abused his power, its ridiculous to see what Obama has done and know in 100 days hes done every bit as much damage as Bush did in 8 years.

Article

EDIT

Seems the Obama Administration threw laws to the wind long ago and were hoping to silence protesters through use of (illegal) force. This certainly confirms that. It seems "Hope and Change" was the advertisement leading to "Hammer and Sickle". It seems this is the same tune the banks sang a few months back when some were forced to take TARP funds they didnt want.

Unless of course theres a poster whos going to say Obama ignoring rule of law and forcing companies to do as he says is just the spirit of our countrys government.....

Article

New Allegations Of White House Threats Over Chrysler

Creditors to Chrysler describe negotiations with the company and the Obama administration as "a farce," saying the administration was bent on forcing their hands using hardball tactics and threats.

Conversations with administration officials left them expecting that they would be politically targeted, two participants in the negotiations said.

Although the focus has so been on allegations that the White House threatened Perella Weinberg, sources familiar with the matter say that other firms felt they were threatened as well. None of the sources would agree to speak except on the condition of anonymity, citing fear of political repercussions.

The sources, who represent creditors to Chrysler, say they were taken aback by the hardball tactics that the Obama administration employed to cajole them into acquiescing to plans to restructure Chrysler. One person described the administration as the most shocking "end justifies the means" group they have ever encountered. Another characterized Obama was "the most dangerous smooth talker on the planet- and I knew Kissinger." Both were voters for Obama in the last election.

One participant in negotiations said that the administration's tactic was to present what one described as a "madman theory of the presidency" in which the President is someone to be feared because he was willing to do anything to get his way. The person said this threat was taken very seriously by his firm.

The White House has denied the allegation that it threatened Perella Weinberg.

Last week Obama singled out the firms that continue to oppose his plan for Chrysler, saying he would not stand with them. Perella Weinberg says it was convinced to support the plan by this stark drawing of a line between firms that have the president's backing and those that did not. They didn't want to be on the wrong side of Obama. Privately, administration officials have expressed confidence that other firms will switch sides for this reason.

These allegations add to the picture of an administration willing to use intimidation to win over support for its Chrysler plans--and then categorically deny it.

 

[Stunt]

Awww...poor investors losing on a high risk and unsuccessful turn around...
I couldn't care less who gets the scraps of Chrysler, everyone is already a loser...investors, public (via gov't), union, employees.
Move on to more important things.

 

[newnameman]

Originally posted by: Stunt
Awww...poor investors losing on a high risk and unsuccessful turn around...
I couldn't care less who gets the scraps of Chrysler, everyone is already a loser...investors, public (via gov't), union, employees.
Move on to more important things.

Yeah, who cares about following the law? And the Constitution's just a goddamn piece of paper, isn't it?

 

[Fern]

Originally posted by: Stunt
Awww...poor investors losing on a high risk and unsuccessful turn around...
I couldn't care less who gets the scraps of Chrysler, everyone is already a loser...investors, public (via gov't), union, employees.
Move on to more important things.

Haha, that made me laugh out loud.

Investors losing on high risk... Hasn't that been what Obama's been preventing with all these bailouts?

OTOH, I think you miss the main point - the Obama admin brushing aside the rules of law. Let the investor make take their losses or gains, but no need to break the rules of law that they are sworn to uphold.

Stepping in to indemify the losers who bet on high risk stuff, then breaking the rules to take away from those who didn't bet on high risk so as to pay the losers under these bailouts (these creditors were secured, not nearly so high risk as the ones being helped by Obama at their expense)

And that is exactly what has been going on lately. Yeah, instead let the losers take their losses, and don't make the others pay for losers' gambles (like we're seeing here). What's wrong with that?

Fern

 

[fskimospy]

Fern, please detail what laws are being broken.

 

[charrison]

Originally posted by: eskimospy
Fern, please detail what laws are being broken.

secured creditors are first in line when it comes to bankruptcy. These investors were thrown under by the bus by this admin.

This could be very bad for the credit markets if they know secured loans will not be honored by law.

 

[Thump553]

What a bogus thread. The OP links to the objecting creditor's legal pleadings as his authority. Not only that, but the referenced pleadings don't come anywhere close to proving (or even claiming, for that matter) that "Capitalism fires back at the Obama administration" as the OP claims. It merely argues a technical point-that an asset sale proposed by the debtor in possession should be briefly delayed so that those creditors can more closely examine the transaction. Whether the bankruptcy court grants this stay will not be determinative in this case, by a long shot.

This bankruptcy is going to be heavy duty litigation, with all sides retaining major lawfirms and taking the usual big firm "bury them with paper" approach. The OP's proof is just a very trivial step along the way.

 

[fskimospy]

Originally posted by: charrison

Originally posted by: eskimospy
Fern, please detail what laws are being broken.

secured creditors are first in line when it comes to bankruptcy. These investors were thrown under by the bus by this admin.

This could be very bad for the credit markets if they know secured loans will not be honored by law.

It's not that the secured loans aren't being honored, it's that the people with the secured loans are saying that they are worth more than they are getting for them.

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.

 

[ElFenix]

i wonder what the actual assets that the security is on are worth. if they're undersecured then that's their problem.

and i agree with eskimospy that the bondholders shouldn't get any value that is due to the .gov propping up chrysler.

 

[Vic]

True laissez faire capitalism would have seen those 'secured' creditors getting their pennies on the dollar months (if not years) ago for their poor investment, instead of their debtor being propped up by govt loans recently and 'restructured' God knows how many times in the past.

The OP's rant is as capitalist as the low-rent finance lender who sent his payday borrower to the welfare office so he could make his monthly payments complaining to the govt when the welfare gets cut off.

 

[sandorski]

Government Bailed them out, certain people were upset over their Tax $ being spent in such a way. Government moved to secure their Investment, certain people were upset over their Tax $ being protected. From what I see, "certain people" are largely the same group in both instances.

 

[K1052]

Originally posted by: ElFenix
i wonder what the actual assets that the security is on are worth. if they're undersecured then that's their problem.

and i agree with eskimospy that the bondholders shouldn't get any value that is due to the .gov propping up chrysler.

I've been told by others that there is no way the bonds could ever have been sold in the first place if they were collateralized to overvalued assets and that they really are worth near face value, even accounting for the relatively minor falloff in auto industry sales.

Fortunately I wasn't drunk when this was uttered to me lest I be taken in.

 

[halik]

Originally posted by: Stunt
Awww...poor investors losing on a high risk and unsuccessful turn around...
I couldn't care less who gets the scraps of Chrysler, everyone is already a loser...investors, public (via gov't), union, employees.
Move on to more important things.

Secured debt is not high risk ... the claim to collateral is intended to make it low risk and thus reducing the firms cost of capital.

 

[Beattie]

From reading that statement it seems pretty simple. They are trying to "sell" Chrysler at a value that is below what the secured debt owed to the "senior lenders" value is without their consent. It also seems that someone is trying to pay out unsecured creditors before the "senior" ones. It appears that neither of these things are legal.

 

[K1052]

Originally posted by: Beattie
From reading that statement it seems pretty simple. They are trying to "sell" Chrysler at a value that is below what the secured debt owed to the "senior lenders" value is without their consent. It also seems that someone is trying to pay out unsecured creditors before the "senior" ones. It appears that neither of these things are legal.

The main question in court is going to be what value Chrysler's assets really have. The minority secured bondholders who objected to the restructure say it's a lot more than the 33 cents the deal offered. Chrysler's bankruptcy advisers say it's between 9 and 38 cents.

The judge already let Chrysler into the DIP financing so I don't think a general liquidation is going to be forthcoming.

 

[Stunt]

Originally posted by: halik

Originally posted by: Stunt
Awww...poor investors losing on a high risk and unsuccessful turn around...
I couldn't care less who gets the scraps of Chrysler, everyone is already a loser...investors, public (via gov't), union, employees.
Move on to more important things.

Secured debt is not high risk ... the claim to collateral is intended to make it low risk and thus reducing the firms cost of capital.

Giving any sort of money to Chrysler would have been high risk.
I think their debt and bonds have been off the chart terrible for quite some time. I think creditors are the only ones who have made money due to huge interest rates paid for high cost (high risk) capital. Now they are just upset because their risky investment is not going to mature. Well guess what, there's a reason why the return was so high...go buy some Kroger debt if you don't want to accept the risk of your investment.

Don't get me wrong, I want to see laws upheld.
I'm just saying there's no money in this other than the lawyers, just a bunch of scraps for people who have already considered their investment a complete loss.

 

[BarrySotero]

Originally posted by: eskimospy

Originally posted by: charrison

Originally posted by: eskimospy
Fern, please detail what laws are being broken.

secured creditors are first in line when it comes to bankruptcy. These investors were thrown under by the bus by this admin.

This could be very bad for the credit markets if they know secured loans will not be honored by law.

It's not that the secured loans aren't being honored, it's that the people with the secured loans are saying that they are worth more than they are getting for them.

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.

Secured, senior debtors are not only being paid (much) less than what they are entitled to - junior creditors are being paid considerably more (because they are Obama's base and because Obama hates capitalist/investor class - hates!). Obama is the US Chavez except with nicer shoes.

 

[JEDIYoda]

Originally posted by: newnameman

Originally posted by: Stunt
Awww...poor investors losing on a high risk and unsuccessful turn around...
I couldn't care less who gets the scraps of Chrysler, everyone is already a loser...investors, public (via gov't), union, employees.
Move on to more important things.

Yeah, who cares about following the law? And the Constitution's just a goddamn piece of paper, isn't it?

Please detail what laws have been broken?
Please detail what part of the constitution has been violated??

 

[Wreckem]

Originally posted by: JEDIYoda

Originally posted by: newnameman

Originally posted by: Stunt
Awww...poor investors losing on a high risk and unsuccessful turn around...
I couldn't care less who gets the scraps of Chrysler, everyone is already a loser...investors, public (via gov't), union, employees.
Move on to more important things.

Yeah, who cares about following the law? And the Constitution's just a goddamn piece of paper, isn't it?

Please detail what laws have been broken?
Please detail what part of the constitution has been violated??

Obama is trying to subvert US bankruptcy laws.

I believe Ex-Post Facto exists somewhere in the constitution, and while it may not apply specificially, the spirit of ex-post facto is still there.

Not only that this is more or less tantamount to vote buying. Its no secert the Unions have been quite vocal at Obama, this is basically buying them and leaving the people that KEPT Chrysler afloat holding the bag.

Bottom line, is, what the Obama admin is trying to do WILL NOT hold up through appeals. And in the long run its going to cost the tax payers so much more money.

Not only that is could be a constitutional matter, as the Executive branch certaintly DOES NOT have the power to do what hes been doing. The executive branch is supposed to carryout laws NOT SUBVERT them. Its more or less bribery without a way to get out since he and his admin WILL NOT allow TARPS to be repaid anytime soon. Obama is coming off more and more as part of the Chicago machine each day he is in office.

 

[frostedflakes]

Originally posted by: K1052

Originally posted by: Beattie
From reading that statement it seems pretty simple. They are trying to "sell" Chrysler at a value that is below what the secured debt owed to the "senior lenders" value is without their consent. It also seems that someone is trying to pay out unsecured creditors before the "senior" ones. It appears that neither of these things are legal.

The main question in court is going to be what value Chrysler's assets really have. The minority secured bondholders who objected to the restructure say it's a lot more than the 33 cents the deal offered. Chrysler's bankruptcy advisers say it's between 9 and 38 cents.

The judge already let Chrysler into the DIP financing so I don't think a general liquidation is going to be forthcoming.

The problem is that unsecured creditors are getting much more than 29 cents/dollar, which is kind of ass backwards. I don't think secured creditors necessarily expect to get all of their investment back, but they do expect the proper bankruptcy procedure to be followed. My understanding is that in bankruptcy court secured creditors would get first dibs, and then *if* any money is even left over it would be split up among the unsecured creditors, then among others lower on totem poll if there's any left over after that, etc. There's a hierarchy at work and secured creditors are supposed to be the first to get paid back during a bankruptcy.

 

[fskimospy]

Originally posted by: BarrySotero

Secured, senior debtors are not only being paid (much) less than what they are entitled to - junior creditors are being paid considerably more (because they are Obama's base and because Obama hates capitalist/investor class - hates!). Obama is the US Chavez except with nicer shoes.

Is that you Winnar? We've missed you.

 

[smack Down]

Originally posted by: frostedflakes

Originally posted by: K1052

Originally posted by: Beattie
From reading that statement it seems pretty simple. They are trying to "sell" Chrysler at a value that is below what the secured debt owed to the "senior lenders" value is without their consent. It also seems that someone is trying to pay out unsecured creditors before the "senior" ones. It appears that neither of these things are legal.

The main question in court is going to be what value Chrysler's assets really have. The minority secured bondholders who objected to the restructure say it's a lot more than the 33 cents the deal offered. Chrysler's bankruptcy advisers say it's between 9 and 38 cents.

The judge already let Chrysler into the DIP financing so I don't think a general liquidation is going to be forthcoming.

The problem is that unsecured creditors are getting much more than 29 cents/dollar, which is kind of ass backwards. I don't think secured creditors necessarily expect to get all of their investment back, but they do expect the proper bankruptcy procedure to be followed. My understanding is that in bankruptcy court secured creditors would get first dibs, and then *if* any money is even left over it would be split up among the unsecured creditors, then among others lower on totem poll if there's any left over after that, etc. There's a hierarchy at work and secured creditors are supposed to be the first to get paid back during a bankruptcy.

That is nice and all but the only reason the secured creditors are getting 29 cents on the dollar is because the fiat partnership. The only way to get the fiat partnership is to get the union support.

 

[whylaff]

Chapter 11 is not this cut and dry. I?m sure this case will see a lot of strongly worded motions filed, it?s not exactly pocket change that they are dealing with. The Supreme Court case that is cited is from 1935?before the shift of the court away from economic due process.

 

[heyheybooboo]

1) The bankruptcy lawyers may get $200 million for their *advice* in the Chrysler case (somewhere in the range of $900/hr).

2) In typical Con fashion the :| O U T R A G E :| directed at the Obama Administration has no basis in fact.

The so-called 'secured debtor' dissidents (over 70% of creditors have agreed to the settlement) purchased Chrysler obligations in some cases at $.50 on the dollar hoping to be bailed out at the face value of the debt.

So in effect the 'dissidents' are complaining about getting $.60/dollar when 70% of the creditors are getting $.30/dollar.

 

[Robor]

Originally posted by: sandorski
Government Bailed them out, certain people were upset over their Tax $ being spent in such a way. Government moved to secure their Investment, certain people were upset over their Tax $ being protected. From what I see, "certain people" are largely the same group in both instances.

Just more faux outrage. Tea party time!