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

To: Wayners who wrote (35436)	5/8/2009 12:54:25 PM
From: DuckTapeSunroof	Respond to of 71588

Re: "The White House appeared to be playing the role of Bankruptcy Judge, telling other bondholders to accept less $ on the dollar of what they are owed. That is a violation of Seperation of Power and is unconstitutional." No, they are not doing that... and no, it is not 'unconstitutional'. Wayne, ANYONE (with a financial interest in the bankrupt company) can propose settlement terms... either to other creditors or to the Court directly. And, the federal Bankruptcy Court will rule on how all of the debt gets disposed of... (not the administration). I fear you are forgetting a couple of salient points in this matter: 1) the largest creditor (after the out-year pension obligations) is Uncle Sammy. (And money TALKS!) 2) Uncle Sammy (is a SECURED debt holder, like other secured debt holders, or even with superior contractual terms on it's Chrysler debt because of specific conditions written into the original loan documents when Uncle Sammy extended the loans) has ALREADY secured the votes and cooperation of WELL OVER 90% off all the remaining Chrysler creditors. (A very high approval ratio as these things go....) 3) Any of the other creditors are free to propose their own plans for reorganization to the Court... but, if they want to win they'll need to win over a lot of the other creditors to whatever plan they propose... and to do that they'd better be prepared to THROW A LOT OF CASH into the pot, like Uncle Sammy is doing (as "debtor-in-possession"), to help Chrysler survive long enough to actually be WORTH SOMETHING to the creditors. On the scrap heap of full liquidation the company's debt won't be worth two cents on the dollar (while they have already turned down 33 cents on the buck - the best offer they are ever gonna see). But ownership or debt in a REVITALIZED COMPANY, shorn of it's too-massive debt burden, might actually be worth something in years to come. And, these few remaining pitiful remnants of an opposition, this tiny handful of Vulture Investment firms owning only around 5% or 6% of the total debt now --- have made perfectly clear they are not not prepared to put a single red cent into the reorganization pot... so I would not expect any of their "plans" to get anywhere... either with the Judge or with the other creditors. They don't have the VOTES... and they don't have the MONEY.