In the Chrysler banktuptcy deal he proposes, he wants secured debtholders to take $.30 on the dollar, taking a back seat to subordinated UAW, who would get $.50 on the dollar. Those who opposed were threatenedby the Obama smear machine that distorts thefacts (i.e. bondholders are hedge funds scammingonce again to profit at the expense of taxpayers). Secured debtholders accept a lower return on their investment in exchange fortheir fixed income investments being secured by the assets of a company. Lower return with commensurately lower risk.However, Obama wants to rewrite the law and allow the UAW to step up on claims and receive a higher share of their stake in Chrysler's liabilities.
This is much like his intention to havea justice on the Supreme Courtignore the rule of law and allow decisions be made on a "social justice," otherwise stated HIS preferred recipients. I'm sorry, but being the President and Supreme Court justice does not trump the rule of law. The message this sends to investors is that America is not a safe place to invest, because their contracts are worthless, and at the discretion of the President and justices who have liberal agendas. [:@]
And people called Bush a dictator. This is real evidence of paying off your supporters and making things up as you go along. The inrony of it all is the fact it comes at a major expense of the teacher's union.The funny thing is that they are too dumb to realise it's their money they are givng up. The sad thing is the fact they are teaching some of your kids.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
More fuel for the fire that will consume them next year when they have to fight to keep their phony baloney jobs. Hell hath no fury like a scalded taxpayer when the wounds are fresh.
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Kevin Haendiges
NAHC Life Member
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http://hunting-indiana.com
In the GM banktuptcy deal he proposes, he wants secured debtholders to take $.30 on the dollar, taking a back seat to subordinated UAW, who would get $.50 on the dollar. Those who opposed were threatenedby the Obama smear machine that distorts thefacts (i.e. bondholders are hedge funds scammingonce again to profit at the expense of taxpayers). Secured debtholders accept a lower return on their investment in exchange fortheir fixed income investments being secured by the assets of a company. Lower return with commensurately lower risk. My mother is a middle class GM bondholderwho stands to lose on this criminal endeavor.Obama wants to rewrite the law and allow the UAW to step up on claims and receive a higher share of their stake in GM's liabilities.
This is much like his intention to havea justice on the Supreme Courtignore the rule of law and allow decisions be made on a "social justice," otherwise stated HIS preferred recipients. I'm sorry, but being the President and Supreme Court justice does not trump the rule of law. The message this sends to investors is that America is not a safe place to invest, because their contracts are worthless, and at the discretion of the President and justices who have liberal agendas. [:@]
I think you are confusing GM with Chrysler. The secured creditors at Chrysler were offered about two billion dollars in cashto settle 6.9 Billion dollars of secured Chrysler debt, which is about thirty cents on the dollar. This is indeed a poor recovery for secured creditors. The UAW gets 55% of the stock in the new Chrysler when it emerges from bankruptcy. Since Chrysler was privately held by the hedge fund Cerebrus and its shares were not publicly traded, there is no way to assign a value to the 55% UAW equity share in the new company. Right now the stock is probably worthless so in reality the secured creditors were being offered thirty cents on the dollar while the UAW gets an asset that currently has no value. The UAW said that it plans to sell its stock immeadiately after the bankrupcy is settled.
In the case ofGM, General Motors management hasproposed a restructuring that would give the U.S. Government 50% of the equity in the company in exchange for $10 billion that it owes the Government in TARP loans. The UAW would get 39% of the equity in exchange for about $10 billion it owes to the UAW health and pension funds, the bondholders who own $27 billion in GM debt would get a 10% share of thecompany while current shareholders would get 1%. At GM's current price per share of about $1.65 and with 610.5 million shares outstanding, the company has a market value of about $1 billion dollars. With their 10% share of the equity the bondholders would get about $100 million in stockfor their $27 billion dollars in bonds or about 0.3 cents on the dollar. However, unlike the Chrysler creditors,I do not believe that the GM bondholders claims are actually secured by GM assets. The UAW is getting about $390 million worth of stockin exchange for $10 billion owed to the UAW or about 4 cents on the dollar. Both the UAW and the bondholders are unsecured creditors so it is difficult to say who has the more senior claim and therefore is entitled to a higher recovery. The Government is getting about 5 cents on the dollar so the taxpayers do best in the GM proposal but still stand tosuffer a loss of 95% of the TARP money loaned to GM.
This proposal has not yet been accepted by any of the parties; Treasury, bondholders or the UAW and will also certainly be modified before the June 1 deadline for restructuring. It is unlikely there will be agreement and GM will almost certainly file for bankruptcyby June 1. It will then be up to abankruptcy judge to determine what share of the new company each party will get when it emerges from bankruptcy or what relative share of the proceeds they will receive ifGM is simply liquidated.
I think you are confusing GM with Chrysler. The secured creditors at Chrysler were offered about two billion dollars in cashto settle 6.9 Billion dollars of secured Chrysler debt, which is about thirty cents on the dollar. This is indeed a poor recovery for secured creditors. The UAW gets 55% of the stock in the new Chrysler when it emerges from bankruptcy. Since Chrysler was privately held by the hedge fund Cerebrus and its shares were not publicly traded, there is no way to assign a value to the 55% UAW equity share in the new company. Right now the stock is probably worthless so in reality the secured creditors were being offered thirty cents on the dollar while the UAW gets an asset that currently has no value. The UAW said that it plans to sell its stock immeadiately after the bankrupcy is settled.
It doesn't matter. The UAW isn't entitled to any of the new stock until the secured crediters are taken care of first. They have the right to that 55% of the shares and/or demand an auction for the pieces of Chrysler.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
Yep, sorry. I WENT BACK AND EDITED IT TO MAKE IT CORRECT. Same story, I just confused the two companies. The point I made is equally valid, however, as your clarification implies. Thanks for the heads up, Lemaitre.
Ok.. Heres the thought provoking question of the day. Whats the difference in this Chrysler/GM deal and Chavez seizing the oil indistry in Venezuela? I can see damned little difference...
Ok.. Heres the thought provoking question of the day. Whats the difference in this Chrysler/GM deal and Chavez seizing the oil indistry in Venezuela? I can see damned little difference...
falcon backed the auto bailouts.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
It's bass-ackwards. Secured credit holders should get "1st dibs" according to accepted legal practices (as far as my pea brain is aware). Of course, that's all pre-Obamy.
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If you always do what you always did, you will always get what you always got.
Obama puts UAW above property rights
The sad thing is the fact they are teaching some of your kids.
