How does such irresponsible behavior help to encourage investments in American economy?
In the Chrysler deal, the [United Auto Workers] were unsecured creditors and the Chrysler bondholders were secured creditors. The bondholders received 28% of the value of their $6.9 billion in bonds in cash; the Union will receive stock worth approximately $4.2 billion, and a note for an additional $4.58 billion, which represents 82% of the value of their claim. Either the government negotiators have dyslexia and have made a terrible mistake in their paperwork, or this is political payoff writ large. Is this not the equivalent of financial waterboarding? And thus we enter a brazen new era of government, when the White House is openly complicit in the theft of, as a matter of fact is directing, the looting of private property from investors.
Once 2/3 of secured creditors agree to the terms, the other 1/3 must also accept and cannot demand the fair value of their debt.
70% of secured creditors are large banks like BofA on the leash of $300 billion of TARP money and they already accepted the terms (TARP, TARP, TARP = nationalization).
The only legal avenue for the remaining 30% creditors (pension funds and the like) is to argue that the deal was not made in good faith (which is true, but go try to prove it)
In the Chrysler deal, the [United Auto Workers] were unsecured creditors and the Chrysler bondholders were secured creditors. The bondholders received 28% of the value of their $6.9 billion in bonds in cash; the Union will receive stock worth approximately $4.2 billion, and a note for an additional $4.58 billion, which represents 82% of the value of their claim. Either the government negotiators have dyslexia and have made a terrible mistake in their paperwork, or this is political payoff writ large. Is this not the equivalent of financial waterboarding? And thus we enter a brazen new era of government, when the White House is openly complicit in the theft of, as a matter of fact is directing, the looting of private property from investors.
Once 2/3 of secured creditors agree to the terms, the other 1/3 must also accept and cannot demand the fair value of their debt.
70% of secured creditors are large banks like BofA on the leash of $300 billion of TARP money and they already accepted the terms (TARP, TARP, TARP = nationalization).
The only legal avenue for the remaining 30% creditors (pension funds and the like) is to argue that the deal was not made in good faith (which is true, but go try to prove it)