The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Galirayo who wrote (202114)	5/13/2009 5:23:57 PM
From: Elroy Jetson	Read Replies (2) of 306849

Minority bondholders have complained about the deal they agreed to in lieu of bankruptcy court. But the simple fact is their agreement was voluntary and they clearly understood they obtained a better deal this way. Bankruptcy is a gamble, even for "secured" bondholders. amlawdaily.typepad.com "Section 363 of the Bankruptcy Code gives the bankrupt entity, in this case, Chrysler, the right to sell assets to another organization, in this case Fiat, BEFORE creditors can challenge the Chapter 11 reorganization plan. This significantly reduces the collateral against which secured creditors can make claims in bankruptcy. The long and short is this: Secured creditors might have gotten more in liquidation than they were being offered before Chrysler filed for bankruptcy. However, because of section 363 of the bankruptcy code, Chrysler can sell substantially all of its assets to Fiat without creditor approval and before it has a definitive reorganization plan This leaves the secured lenders out of luck. They could end up with less money than had they accepted the deal offered them earlier." Whinging is so unattractive. .

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