Presidential Task Force Shuns Non-TARP Chrysler Bondholders

Edward Niedermeyer
by Edward Niedermeyer

“Chrysler’s bankruptcy,” according to President Obama’s statement today, “is not a sign of weakness.” The goal is not to radically restructure the business of a firm that has been failing for decades and currently makes some of the least desirable vehicles on the market. No, for Obama and his task force, this is about going after evil speculators. After lauding the noble sacrifices of the UAW (which will own 55 percent of New New Chrysler), JP Morgan (recipient of $25 billion in TARP funds) and Daimler (who raped Chrysler in the first place), Obama glowers at the mean, nasty speculators who are “forcing” Chrysler into bankruptcy. “In particular,” explains Obama, “a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices and they would have to make none. Some demanded twice the return that other lenders were getting. I don’t stand with them.” So who are these shadowy money men who just won’t let Chrysler run free of their oppressive debts?

The Wall Street Journal reports that the holders of about $1 billion in Chrysler debt had offered to take 40 percent of their loans’ face value, and were “flatly rejected or ignored” by the ChryCo and the Treasury. These investors are calling themselves the “non-TARP” lenders, distinguishing themselves from the larger creditors like JP Morgan (which was praised for its “sacrifice” by Obama). Their argument is that, as first-lien creditors, they deserve the nearly 50 percent return they should see in a bankruptcy, an offer that the Obama administration wouldn’t match. The “Non-TARP Lenders” also say that General Motors Corp.’s senior secured lenders are being left with 100% of recoveries, and that GM’s unsecured bondholders would receive a far better recovery than Chrysler’s first-lien secured lenders.

One of these self-centered, American-economy-killing bloodsuckers is profiled by the WSJ. Geoffrey Gwin, who invests on behalf of some 80,000 retirement accounts is torn between taking a haircut on behalf of his clients’ retirements and being labeled as an unpatriotic money-grubber. And his personal history makes the predicament even more poignant. “It’s very hard for me to deal with this,” Gwin tells the WSJ. “As horrible as the situation looks for Chrysler’s employees, I keep thinking about how horrible my own family felt when Delta was going to file for bankruptcy and my father’s pension was going to take a hit. No task force or the federal government came to his aid then.”

Edward Niedermeyer
Edward Niedermeyer

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  • U mad scientist U mad scientist on May 01, 2009
    Is the USA still a nation of Law? They're perfectly entitled to go to court over this, and if they have the law on their side, they'll win (and it doesn't look like they will given the precedent in the law). Perhaps you should should learn this whole legal system thing works first. - Agenthex, so I guess that makes you a new gay basher? Am I the one making up baseless conspiracy theories?
  • Anonymous Anonymous on May 02, 2009

    [...] Some demanded twice the return that other lenders were getting. I don’t stand with them.” - Barak Obama “It stands to reason that where there’s sacrifice, there’s someone collecting sacrificial [...]

  • Ajla Those letters look like they are from AutoZone.
  • Analoggrotto Kia EV9 was voted the best vehicle in the world and this is the best TOYOTA can do? Nice try, next.
  • 3-On-The-Tree 4cyl as well.
  • Luke42 I want more information about Ford’s Project T3.The Silverado EV needs some competition beyond just the Rivian truck. The Cybertruck has missed the mark.The Cybertruck is special in that it’s the first time Tesla has introduced an uncompetitive EV. I hope the company learns from their mistakes. While Tesla is learning what they did wrong, I’ll be shopping to replace my GMC Sierra Hybrid with a Chevy, a Ford, or a Rivian — all while happily driving my Model Y.
  • 3-On-The-Tree I wished they wouldn’t go to the twin turbo V6. That’s why I bought a 2021 Tundra V8.
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