Capitalism fires back at the Obama Administration *Updated*

[Robor]

Originally posted by: eskimospy

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.

Definitely smells like it.

 

[frostedflakes]

Originally posted by: 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.

Do you have a link about them purchasing at only $0.50 on the dollar? If true, I hadn't heard about that.

 

[K1052]

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.

I believe there are exceptions when a majority of the secured creditors agree to a certain course of action, the restructure in this case. The court could force the holdouts into the deal.

 

[heyheybooboo]

Originally posted by: frostedflakes

Originally posted by: 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.

Do you have a link about them purchasing at only $0.50 on the dollar? If true, I hadn't heard about that.

It was reported on Bloomberg in the last 2-3 days. They are simply hedge funds trading on Chrysler debt. The latest article (May 5th):

Chrysler Secured Lenders Will File Secrecy Request, Lawyer Says

Chrysler debt is trading at 27 cents to 28 cents on the dollar, according to two people familiar with the trades.

Chrysler has agreement from 62 percent of its secured lenders holding 90 percent of $6.9 billion in loans, a lawyer for the lenders said yesterday in court.

I was wrong. The holders of 90% of the debt have agreed to $.30/dollar.

 

[RightIsWrong]

Why are those that put in 20, 30, 40 years of their life working 40+ hours per week not considered secured debtors also? They put up their collateral (time worked) for a "secured", "guaranteed" retirement package.

Those that are complaining over losing 1/2 of their money are too greedy and selfish in their mad dash to try to have made a fast buck off of the taxpayer and any bailouts to realize that those that they are stealing from have lost 1/2 of their lives to the very same company.

 

[Robor]

Originally posted by: RightIsWrong
Why are those that put in 20, 30, 40 years of their life working 40+ hours per week not considered secured debtors also? They put up their collateral (time worked) for a "secured", "guaranteed" retirement package.

Those that are complaining over losing 1/2 of their money are too greedy and selfish in their mad dash to try to have made a fast buck off of the taxpayer and any bailouts to realize that those that they are stealing from have lost 1/2 of their lives to the very same company.

They vote (D). Duh!

 

[Stuxnet]

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.

So when the Bush admin ignores the law, he's a Traitor in Chief, but when the Obama admin does it, it's just business as usual?

Why am I not surprised?

 

[whylaff]

Originally posted by: jbourne77

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.

So when the Bush admin ignores the law, he's a Traitor in Chief, but when the Obama admin does it, it's just business as usual?

Why am I not surprised?

What law is the Obama Administration ignoring in this situation?

 

[waggy]

hehe i love how people's ideas and attiudes change just because of who they have in office. please not im not just pointing at Dems..


bunch of fucking hypcrits.

 

[CADsortaGUY]

Originally posted by: Robor

Originally posted by: RightIsWrong
Why are those that put in 20, 30, 40 years of their life working 40+ hours per week not considered secured debtors also? They put up their collateral (time worked) for a "secured", "guaranteed" retirement package.

Those that are complaining over losing 1/2 of their money are too greedy and selfish in their mad dash to try to have made a fast buck off of the taxpayer and any bailouts to realize that those that they are stealing from have lost 1/2 of their lives to the very same company.

They vote (D). Duh!

Or because they aren't "secured lenders" and have exchanged their labor for monetary compensation. Employees have little to zero recourse in BK or restructuring so I don't know why you leftists always try to put them in the same category as actual lenders(secured or otherwise).

 

[Michael]

To be 100% clear, the pension payouts are guaranteed by the US government. What is at risk is additional healthcare coverage.

I am interested in seeing what the courts have to say. The workers' claims are unsecured. You can change the law and make them secured, but that will increase the cost of other debt as they're forced further down in line. Current law says they are unsecured. How many years of their life they worked there (and were paid for it) is not a factor in the law.

What I want to see is how much the court treats the concessions that go with the claims as bankruptcy funding and key to getting it out of Chapter 11. It may be possible that the payouts will be looked at as a deal as a whole. Probably not, though and bond holders will get more.

I just hope it is sorted soon enough to get GM off the table.

Michael

 

[CPA]

nm

 

[umbrella39]

Originally posted by: 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.

Go back to your old screen name please. Bai.

 

[jonks]

Originally posted by: Specop 007
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.

The hundreds of thousands dead in Iraq may differ in that assessment, but they're brownish people so I guess they don't count.

 

[Fern]

The secured wanted only 50 cents on the dollar; likley less then they couold get as secured creditors according to their attorney.

They were first in line and acording to their bankruptcy attorney from White & case (some of you will know that law firm) were asking for only 50 cents and thereby they were giving up 20 billion to the unsecured creditors.

There are also now more claims of improper (possibly illegal) threats made by the WH against those secured creditors who refused to take the 29 cents.

Steve Rattner (he's front man for the WH in these negotiations and is under investigation for bribery and other problems) threated to 'destroy' their reputation etc by using the WH press corp to disseminate stories/article against them. Then Obama himself took the platform to rail against them. Highly unusual for a President to interject himself into this sort of matter and hurl such critisms.

Yes, the unions are the benficiary of this WH intererence, they will own (IIRC) the majority of Chrysler under the WH plan. Maybe it's it's just me since I'm no Obama acolyte, but that looks awfully awfully bad to me. Obama using Taxpayer money to buy Chrysler and give it to the unions (in effect).

BTW: These so-called hedge funds the libs (and MSM) love to hate are just handling other peoples money - mostly retirement funds. So they have a fidiciary responsibility to do the best they can for their clients.

And by beating down these investors Obama is robbing from groups' retirement plans to help out the unions.

It looks like flat-out political patronage (repaying union support), but maybe there's another angle at play too. Obama may be robbing from the one group to prop up Chrysler and unions because if they fail their pension benefits would likely become a major burden on the PBGC. While I would not like to see the PBGC absorb that (potentially catastophic) problem, I do not like the backroom and apparently unethical involvement of the federal government - they don't belong involved like this in the 1st place. These are not Constitutional duties of the Executive branch and is an exceptional expansion of federal government powers, and something they are uniquely unqualified for.

BTW: I say 'apparently unethical' because today's news programs say the WH is calling the lawyer a liar. Most unseemly business IMO.

Fern

 

[MovingTarget]

Capitalism fires back? Hardly. The current administration doesn't want to see capitalism die, and they have done everything they can to keep the current capitalist status quo from turning into a full-on train wreck. OMGSOCIALISM!! does not apply here. Heck, people would be saying the same thing about FDR if he was president today doing the exact same things as in the thirties. Capitalism has the tendency to want to bite the hand that tries to feed it in these situations...

 

[Specop 007]

Bump for new update

 

[Specop 007]

Originally posted by: jonks

Originally posted by: Specop 007
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.

The hundreds of thousands dead in Iraq may differ in that assessment, but they're brownish people so I guess they don't count.

Hmmm. You make up an arbitrarily large number, I'll make up a ridiculously small one.

I think the 398 dead in Iraq think it was a worthwhile cause to remove Saddam.

 

[Robor]

Originally posted by: Specop 007
Bump to add lunacy

Fixed.

Bio of article writer

 

[K1052]

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.

Mean socialist politician threatens doe-eyed litigators and fair playing hedge fund managers....film at 11.

 

[Budmantom]

Originally posted by: MovingTarget
Capitalism fires back? Hardly. The current administration doesn't want to see capitalism die, and they have done everything they can to keep the current capitalist status quo from turning into a full-on train wreck. OMGSOCIALISM!! does not apply here. Heck, people would be saying the same thing about FDR if he was president today doing the exact same things as in the thirties. Capitalism has the tendency to want to bite the hand that tries to feed it in these situations...

LOL

How is our socialist president helping capitalism?

 

[heyheybooboo]

Originally posted by: K1052

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.

Mean socialist politician threatens doe-eyed litigators and fair playing hedge fund managers....film at 11.

Instead of a teddy bear my little girl wants a soft and fuzzy doe-eyed litigator for her birthday

 

[Beattie]

Originally posted by: MovingTarget
Capitalism fires back? Hardly. The current administration doesn't want to see capitalism die, and they have done everything they can to keep the current capitalist status quo from turning into a full-on train wreck. OMGSOCIALISM!! does not apply here. Heck, people would be saying the same thing about FDR if he was president today doing the exact same things as in the thirties. Capitalism has the tendency to want to bite the hand that tries to feed it in these situations...

Uhh, that was socialist back then also.

 

[glenn1]

Here's a story which gives an overview of the first legal filings from the non-TARP bondholders. I'm not a lawyer so I can't give a whole lot of insight on it, but perhaps someone else can.

 

[theeedude]

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