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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: Wayners who wrote (35419)	5/7/2009 11:37:36 AM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 71588

Re: "So what authority does the U.S. Govt have over other Chrysler bond holders?" None. But the US government is now one of the LARGEST creditors (if not the largest) and it's the federal Bankruptcy court that will be making the decisions about how to reorder the debts and financial obligations to best craft a viable ongoing business --- which is the purpose of chapter 11 filings.

To: Wayners who wrote (35419)	5/7/2009 9:17:19 PM
From: rich evans	1 Recommendation Read Replies (2) \| Respond to of 71588

The point of CH11 bankruptcy is to reorganize not liquidate. Liquidation would give the secured bondholders priority. But to reorganize , Chrysler needs billions of dollars of post petition financing. This under the code give the US priority who is the only one willing to put up the dip financing. So the assets get sold under 363b1 of the code and the proceeds go to the US which has priority. All according to the law of bankruptcy applicable to Chrysler and any other company going thru Ch11. The US then gets the proceeds from buying Chrysler assets onlythru a new company. It bids for the assets and wins as no one else wants the assets. The secured creditors could bid for the assets and own the assets by outbidding the US but they don't want to. The US bid gets paid to the trustee in bankruptcy who then gives the money back to the US for its priority loan of DIP financing. The US then gives the stock in the new company to the union , to FIAT etc as it wishes. Rich