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Politics : View from the Center and Left
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To: Travis_Bickle who wrote (111823)5/24/2009 1:23:53 PM
From: Cogito  Read Replies (1) of 541729
 
>>We are, supposedly, a nation of laws. And those laws say that GM's bankrupt corpse owes me $10k plus accrued interest, and they say that the government has no more ability to dictate how the bankruptcy estate's assets are distributed than do I.<<

Seminole -

To be accurate, the government does indeed have the ability to dictate how a bankrupt entity's assets are distributed. It just happens to be the judicial branch that has that ability.

It should also be noted that holding senior or secured debt in a bankrupt company never guarantees that you will be made completely whole. If the company's assets don't add up to the full value of the senior debt, then its holders won't get all of their money. Ipso facto.

In the case of Chrysler, what I gather is that the Obama Administration negotiated with the holders of the senior debt, and got them to agree to accept a specific percentage of the face value of the debt. Even if "pressure" was brought to bear, there was negotiation, which occurs frequently in bankruptcy cases before they go to the courts. The interested parties, in this case, essentially made an agreement to amend the terms of their original contract. There is nothing extralegal or criminal about that.

- Allen
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