Questions Chrysler's chapter 11

[Thump553]

halik: There is really no such thing as unsecured and secured creditors, just unsecured and secured claims. If the holdouts are truely holding claims that are 100% secured by liquidable assets, then they have the right to object. As I understand it, the government (and all the other creditor classes) contend that the holdouts are only secured to roughly 29% of the amount of their claims in the event of a liquidation, so they should have taken the deal that was offered.

Its like any settlement negotiations. At least one side is bluffing.

Time will tell which side can muster the facts to back up their claims. And how much of the pie is left after bankruptcy costs eat it up (I've seen the figure of $200 million reported as the probable fees for Chyrsler's attys-then the creditors have their own huge atty fees, then the decline in value of the assets if/as the company falls apart).

 

[halik]

Originally posted by: Thump553
halik: There is really no such thing as unsecured and secured creditors, just unsecured and secured claims. If the holdouts are truely holding claims that are 100% secured by liquidable assets, then they have the right to object. As I understand it, the government (and all the other creditor classes) contend that the holdouts are only secured to roughly 29% of the amount of their claims in the event of a liquidation, so they should have taken the deal that was offered.

Its like any settlement negotiations. At least one side is bluffing.

Time will tell which side can muster the facts to back up their claims. And how much of the pie is left after bankruptcy costs eat it up (I've seen the figure of $200 million reported as the probable fees for Chyrsler's attys-then the creditors have their own huge atty fees, then the decline in value of the assets if/as the company falls apart).

Right,
I don't think they're 100% collateralized either, but at the same time I have hard time believing that secured debt revolved 2 years ago is only net 33/29% collateralized. Ultimately if the 29/33 cent plan was a good deal, the administration would have no problems convincing the secured debt holders to go along with it.

Also I should have the historical trading prices of Chrysler CDOs later on this afternoon, so we'll see if the CDO arb play was even feasible.

You're a corporate attorney I take it?