“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.”