By on June 3, 2009

According to Automotive News [sub], the Second Circuit Court of Appeals has granted a stay of Chrysler’s asset sale, pending a hearing scheduled for Friday. The stay comes on a motion (PDF) filed by the Treasurer of Indiana, Richard Mourdock (motivation found here) on behalf of several Indiana funds which hold first-lien secured Chrysler debt. A panel consisting of Chief Judge Dennis Jacobs, Judge Amalya Kearse and Judge Robert Sack will hear Mr Mourdock’s appeal on at 2pm Friday, delaying the Chrysler asset sale which has already been approved by Chrysler’s judge Arthur Gonzalez. If the appeal delays the asset sale past June 15, Fiat could walk away. The appeal follows the arguments of earlier “hedge fund holdouts,” making the case that government is overturning bankruptcy law and screwing secured bondholders to move the UAW to the front of the line. Only the state of Indiana apparently isn’t scared of the alleged government strong-arming that squelched previous bondholder opposition. Hit the jump for selected quotes from their appeal.

“In their Sales Motion, the Debtors seek authority to sell substantially all such collateral, and to distribute the proceeds of such collateral to, among others, unsecured creditors, primarily trade creditors and the UAW. Following such proposed sale and distribution, there will be nothing substantive left in this case. Indeed, the government has repeatedly stated its objective of reorganizing Chrysler within a 30-day time period. To do so, the government needed to avoid the requirements of Chapter 11. The government has done exactly that, by seeking approval of a sub rosa plan without following any of the required procedures for confirmation.”

“The Indiana Pensioners are holders of first priority secured claims. Their claims arise out of nearly $10 billion of loans taken in 2007. These loans financed the purchase of the company, and were hailed at the time for
returning Chrysler to U.S. control.”

“Even though the cases were filed under chapter 11 of the Bankruptcy Code, it is very clear that the Debtors have no intention (or even possibility) of reorganizing these estates. Instead, the Debtors have filed the Sale Motion seeking approval to sell substantially all of their assets, free and clear of liens, to a newly formed company created for the
purpose of this transaction. The purpose of this transaction is to transfer value from the Senior Secured Lenders’ collateral to junior Chrysler stakeholders without regard to the well established legal priority of creditor claims.”

“In particular, the VEBA trust (which has an unsecured claim of approximately $10 billion), will receive a new note with a value of $4.5 billion as well as 55% of the equity interest in New Chrysler. (Hr’g Tr. 234:3-235:6) Fiat, one of the Debtors’ foreign competitors, is slated to receive 20% of New Chrysler (with the right to acquire a total of 51%)
in exchange for granting access to its “small car” technology. (Id.) Fiat is not paying any cash for its stake in New Chrysler. (Id.) The Treasury Department, a creditor with liens on the collateral that are still junior to those of the Senior Creditors, is slated to receive an 8% equity interest in New Chrysler.”

“The Debtors abdicated… critical management decisions to the Treasury Department, whose only legally cognizable interest in these cases is that of a third-lien lender.”

“The President branded those Senior Secured Lenders with fiduciary duties to their own investors as “speculators” who were unwilling to make ‘sacrifices.’ He accused these lenders of refusing to compromise and instead seeking ‘an unjustified taxpayer-funded bailout.’ This was not true. First, the Senior Secured Lenders not accepting the unfair deal are not ‘speculators.’ They invested in first-lien secured debt, which is (or at least should be) a conservative investment. Second, certain of the Senior Secured Lenders did offer to compromise. They offered to accept a 50% reduction of their debt, even though they might receive a better recovery in chapter 7 liquidation. Their offer was in stark contrast to other Chrysler stakeholders, whose ‘compromise’ will enable them to receive a much larger recovery then they are entitled to receive under the Bankruptcy Code. Finally, the Indiana Pensioners have never sought a government bailout. Indeed, they are among the few Chrysler stakeholders that can make that statement. Unlike Chrysler and the TARP banks, who accepted billions of taxpayer dollars, the Indiana Pensioners have never received a dime of bailout money from the government. To the contrary, it was the government that was taking from them. Under the government’s plan, billions of dollars of collateral belonging to the Senior Secured Lenders will
be taken away and given to unsecured and junior lien creditors and (ironically) Fiat, a foreign automaker.”

The big question now: do appeals courts understand irony?

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50 Comments on “Chrysler Sale Appealed By Indiana Treasurer...”


  • avatar
    compy386

    *Claps* Senior bondholders are first in line according to the law. Why should they expect anything other than that?

  • avatar

    Good on him!

    From his bio, Mr. Mourdock appears to be a successful scientist, business leader and caretaker of the property of others.

    No surprise that it would take someone so grounded in reality to stand up to the PTFOA hate tsunami.

    And the -R after his name does’t hurt either.

  • avatar
    Bunter1

    Just a gut reaction, but I’m thinking “Sic ‘em, Richard.”

    Wouldn’t it be interesting if the Fed’s were forced to abide by the law. How quaint.

    Bunter

  • avatar
    menno

    Fight to the last.

    At least nobody could sue him for not attempting to look after the funds with which he has been entrusted.

    I know it sounds silly to some, but literally, this case is the pivot around which the rest of the business world will realize the answer to the question:

    Is the United States a nation of law, or under the diktat of a man?

    If it is the former, then we can foresee a day when Barack Hussein Obama stands accused in the court for many crimes against the people. (Hey – HE’S the one who opened the pandora’s box by stating that HE’D be willing to persecute/prosecute former administration officials – something quite common in little banana republics, but which had never been done in US history – so if this snake comes back to bite HIM, well – kizmet/karma is a bitch, ain’t it?)

    If it is the latter, then quite literally, this nation will be finished in its former form.

    Plus, if it is the latter, anyone with wisdom living outside the US with money will be protecting what is theirs by yanking their monies out of the US posthaste. Which will make for an economic collapse in the US so quickly, that it’ll make people’s heads spin. And China, Japan and others may say “fugedaboudit” with regards to investing one red cent into US bonds.

    Where are all of the lefties who decried Bush (along with myself) and accused him of breaking the law, now that the shoe is on the other foot? (Cue the sounds of crickets NOW)

  • avatar
    EEGeek

    If any Appeals Court can turn this away, with the facts so clearly stated, then we know that we have well and truly become a banana republic, where the law means absolutely nothing, and the guys with the guns can do whatever they want without any consequences. For the sake of my kids’ future, I’m very ashamed.

  • avatar
    crackers

    This is just a strategy to get more from the Feds. Indiana wants its fair share of all this bailout money floating around. I am sure we will hear that this has been resolved and some money has changed hands.

  • avatar
    ronin

    Indeed, the consequence is that who will ever want to buy corporate bonds again? And if they do, who will do so without a huge risk premium, knowing that their legal rights can be jettisoned at the whim of a protected cabal? And with a risk premium, the cost of raising funds by the corporation will go up- it means the interest rates will rise, and corporations will either pass the cost to its customers, or die faster.

    Allowing this practice will accelerate the death of shaky companies, as well as ensuring that new innovative companies may never get off the ground.

  • avatar
    wsn

    They must have copied and pasted my previous post on TTAC. But of course the other side, i.e. Chairman Hussein, can simply copy and paste posts by PCH101.

  • avatar
    wsn

    ronin :
    June 3rd, 2009 at 12:44 pm

    Indeed, the consequence is that who will ever want to buy corporate bonds again?

    ————————————————–

    Very true. And we are supposed to be in a credit crunch.

    But then, don’t you see the new model? You got to talk to Chairman Hussein, and he will print another trillion greenbacks to finance you. So, after all we don’t need anyone to purchase any bond, cooperate or federal. (The fed just printed money and bought federal bond. Why do they even bother with the bond part? Just use the printed money.)

  • avatar
    radimus

    I was wondering when this was going to happen.

  • avatar
    Juniper

    I think this is a smoke screen to cover the fact that he invested pension funds in Junk Bonds. I believe they payed $0.43 on the dollar. Not saying the Bond holders didn’t get screwed, but this guy is out on a limb.

  • avatar
    menno

    Right, ronin and wsn. Of course, once the hyperinflation drek hits the air recirculating device, all bets are off.

    Then socialism will have laid everybody “equal” by the fact that within a few years, no matter whether you worked yourself to the bone for 50 years, did honest work, saved, did everything right and never asked for a penny of handouts – your million dollar retirement stash will be equivalent to your 23 year old neighbor’s 2 week paycheck from Burger King.

    The only people “more equal” will be the protected classes behind Federally funded hired guns. (That is politicians and their friends).

    Other protected “special” classes of people will obviously include groups such as homosexuals, pedophiles, people with skin other than pale, people with female genitalia or who think they should have it and don’t, and the state media (once known as non-Fox main-stream-media) and the lazy.

    Hard working, Christian or Jewish white males get to stand at the back of the bus. If we happen to believe in things like Constitional gun rights, the Constitution itself, marriage for only men and women, real money (i.e. gold, per the U.S. Constitution), then we are already essentially being declared “enemies of the state”.

    Wasn’t it Margaret Thatcher who said that socialism only works until you run out of other people’s money?

    Hyperinflation will take away the savings of everyone and will result in a bloody civil war the likes of which lefties never could imagine outside of nightmare-Hollywood horror movie scripts.

    People left with nothing, have nothing to lose. Thus will end the Fourth Reich.

  • avatar
    cmus

    I think Juniper’s got the right of it. Buying junk bonds (with the expectation of Fed money?) is risky, and they’re not going to get their purchase price out of it. I think it’s just a distraction tool to avoid getting called to the carpet for buying the junk bonds in the first place.

  • avatar
    jpcavanaugh

    These arguments make a lot of sense to me, as most of you could have guessed. However, understand that we have not seen the reply. In my experience, for the debtor here to get the first win in front of the bankruptcy judge, they must have had SOME kind of argument going for them. When one of these gets to an appeals court, understand that there are a lot of gray areas in the law. In almost every lawsuit I have ever been involved with, I could understand the result. Doesn’t mean I agreed with it, or that it was good for my client, but I could at least understand it.

    My point is that I think Indiana is correct on the law, as I understand it. However, I suspect that there is a response being made that will make a fair judge at least scratch his chin and think a little. We shall see.

  • avatar
    bozwood

    Juniper :
    June 3rd, 2009 at 1:16 pm

    “I think this is a smoke screen to cover the fact that he invested pension funds in Junk Bonds. I believe they payed $0.43 on the dollar. Not saying the Bond holders didn’t get screwed, but this guy is out on a limb.”

    whether they were junk or not doesn’t matter except to the manager’s job (if purchasing them was outside the mandate of the fund). however, the pension fund still has a duty to get the best terms available. it is also possible that they break even or make money if interest pmts are included and there is a liquidation.

  • avatar
    ruckover

    “If it is the former, then we can foresee a day when Barack Hussein Obama stands accused in the court for many crimes against the people. (Hey – HE’S the one who opened the pandora’s box by stating that HE’D be willing to persecute/prosecute former administration officials – something quite common in little banana republics, but which had never been done in US history – so if this snake comes back to bite HIM, well – kizmet/karma is a bitch, ain’t it?)”

    Menno–I am sorry to say, but plenty of “administration officials” have been prosecuted and convicted after leaving their offices. Surely, no president or VP has ever been convicted, but, then, Jerry Rudolff Ford (previously Leslie Lynch King, Jr.) made sure Nixon escaped punishment for his shenanigans. George Herbert Walker Bush pardoned Casper Weinberger and 5 others to make sure they never faced trial for their involvement with selling arms illegally. He did this because there is a history of the US holding administration officials accountable for their action–look to Tea Pot Dome as an example.

    So, the claim does not ring true, and since you always ask if we a country of laws, I would think you would want a person convicted of a crime if he or she committed one. If, in the future B. Hussein Obama should be found guilty of breaking laws, I would want him to be held accountable for those actions. His conviction, to me, would prove that we are not a banana republic, but a country that holds leaders, as well as the governed, accountable.

  • avatar
    galaxygreymx5

    I’m rather amazed that Chrysler’s bonds can be tied to gay marriage on an automotive website.

    Good on Mr. Mourdock for standing up for what’s right and throwing a wrench into the shenanigans machine that’s been set up with our tax dollars. Hopefully more like him will voice their concerns.

    Now, given that the marriage oppression bestowed upon me is probably spilling over to GM’s bond and pension pilfering, I’m gonna throw on a “Mad Men” DVD so I can remember the good old days when the respectable heterosexual Christian white man was at the front of the bus.

  • avatar
    agenthex

    The big question now: do appeals courts understand irony?

    The only irony here is that the people whining about the law can’t seem to reference any in their favor.

    I wrote a breakdown of how the bankruptcies generally work here:

    http://www.thetruthaboutcars.com/gm-bribes-bondholders-with-15-extra-stake-in-post-c11-new-gm/

    And I didn’t see much disagreement even from law studs.

  • avatar
    menno

    Yes, ruckover, I would want anyone held culpable for real crimes. The banana republic statement is in reference to “paybacks” against political enemies, which – it seems to me – is what is propelling the Demoncrats. Not that I’m a Repugnican, as you probably know if you’ve read much of my commentaries here at TTAC.

    Galaxygrey, it isn’t that white males have a right to ascendency over anyone else at all; it’s just that I actually subscribe to the old-fashioned notion that Americans once held in general.

    You once could be a success and do well in the US no matter your color, creed, gender, or religion or lack thereof. But one thing you couldn’t lack, and that is the ability for hard work. The major benefit of America was once that while it was never perfect, it was less imperfect that much of the rest of the world, where “the caste” or “social strata” you are born into informs the rest of your life, and how well you succeed or didn’t. The problem as I see it, is that we are becoming like the rest of the world in that “some groups” are apparently “more equal” by fiat, than others. THAT is my point. I merely gave some examples of such groups.

    Socialism literally steals from those who work hard, no matter their color/creed/gender/religion or lack of, and hands their money over to the lazy, the well connected or the friends and cronies of crooked politicians. Look at the history of every fascist, socialist or communist nation for examples. They are legion.

    Call me nuts, but when I was growing up, that was simply called theft and extortion with menaces.

    It should matter not that a government is behind the “gun” pointed at the neck demanding money, or whether it is a masked robber in a dark alley.

    The end result is the same.

  • avatar
    wsn

    menno :
    June 3rd, 2009 at 1:19 pm

    Then socialism will have laid everybody “equal” by the fact that within a few years, no matter whether you worked yourself to the bone for 50 years, did honest work, saved, did everything right and never asked for a penny of handouts – your million dollar retirement stash will be equivalent to your 23 year old neighbor’s 2 week paycheck from Burger King.
    ——————————————–

    Probably UAW members will have a 250% salary inflation adjustment per year as a benefit for federal government employees.

  • avatar
    wsn

    menno :
    June 3rd, 2009 at 3:52 pm

    Socialism literally steals from those who work hard, no matter their color/creed/gender/religion or lack of, and hands their money over to the lazy.

    —————————————–

    Handing money to the lazy actually has a sense of generosity in it. But even that is not the case here.

    What’s happening now is that money is collected or printed by the chairman and handed to his minions. If you are just lazy but not one of his minions, sorry, no bailout for you.

  • avatar
    Gardiner Westbound

    It will be interesting to see if the rule of law still stands for anything in Obama’s hopey changey U.S.A.

  • avatar
    Juniper

    Menno
    “Call me nuts”
    OK!

  • avatar
    menno

    Hardy har har, juniper! You’ll have to try waaaay harder than that, to hurt my feelings, partner. I’ve been married for 30 years…

    Badump-bump. (rimshot) Thank you, thank you, I’m here all week. Tip the waitresses.

  • avatar
    Lumbergh21

    I WILL stick to the subject and say that the gentleman from Indiana makes some good points. I will be interested to see how the judges on the appeals board will be able to twist the law to work against senior debt holders and make them junior debt holders. Who knows, maybe they won’t, but I’d be very surprised if anyone was allowed to stand in the way of the President’s plan to “rescue” Chrysler (and GM soon to follow).

  • avatar
    menno

    Gardiner, I am increasingly resigned to the fact that the world will never be quite what it was.

    Hope (my @ss) and change (unfortunately, yes).

  • avatar
    tony7914

    You know, win or lose the man is doing what Indiana expects him to do and that is to try and recover our loses and protect our interests. He may not win anything for us but at least he is trying. It should be interesting to see if the feds offer us a compromise to FO&D.

  • avatar
    agenthex

    This pretty conclusively shows how clueless the “law is being violated” crowd is.

    The seniors creditors likely got more than they deserved from the sales of assets which their bonds are secured against.

    They just don’t like it that additional government dollars are going to new chrysler and not them. Since that’s the extent of their legal argument, don’t expect this to go anywhere.

    I can’t blame them for trying, especially since rubes are so easy to attract as followers and supporters so long as you slander the government.

  • avatar
    Lumbergh21

    agenthex :
    June 3rd, 2009 at 6:29 pm

    This pretty conclusively shows how clueless the “law is being violated” crowd is.

    The seniors creditors likely got more than they deserved from the sales of assets which their bonds are secured against.

    They just don’t like it that additional government dollars are going to new chrysler and not them. Since that’s the extent of their legal argument, don’t expect this to go anywhere.

    I can’t blame them for trying, especially since rubes are so easy to attract as followers and supporters so long as you slander the government.

    Ah yes from the “you’ll get nothing and like it” crowd. It seems to me the government’s promise to take care of everything and solve all your problems is what attracts the real “rubes.”

  • avatar
    tony7914

    @Lumbergh21 :
    June 3rd, 2009 at 6:53 pm

    +1

  • avatar
    agenthex

    They got the value of their assets, which is what they’re legally entitled to. Notice they’re not arguing this point.

    It’s pretty clear they’re only complaining that the government gave some equity to other unrelated parties, which they’re perfectly entitled to and is quite reasonably given that they need a work force, etc, going forward.

    Unfortunately for the holdouts, they only have that idiotic argument, which is why they’ve been losing badly in court. However they’ve been doing alright in the court of public opinion, because apparently the “public” they’ve been pursuing doesn’t ask for evidence or books with laws in them before making snap judgments.

  • avatar
    Matt51

    Indiana as a bond holder deserves to own the assets of Chrysler. No way in hell they should be given to the UAW or Fiat. I agree, this case determines, are we a country of laws, or not?

  • avatar
    menno

    agenthex, perhaps when it is YOUR property or wealth or investment which is diluted by fiat, you’ll change your tune.

    Some of us actually are able to say “that isn’t right” even when we haven’t got a horse in the race. Seems to me that the ability to do that is what civility (sharing the root word for civilization) is all about. Our actually having a basis for believing that there is a real right & wrong, rather than “situational ethics” is where we differ.

    You can consider those of us who believe these things as “rubes” but don’t be shocked if you hear yourselves referred to by us as “useful idiots” for the One.

  • avatar
    KatiePuckrik

    Menno

    “Where are all of the lefties who decried Bush (along with myself) and accused him of breaking the law, now that the shoe is on the other foot? (Cue the sounds of crickets NOW)”

    Whilst I see what point you’re trying to make, there is a world of difference between the two.

    Whilst Mr Obama is playing financial trickery with his “interpretation” of the law, Bush’s “interpretation” of the law, caused THOUSANDS of people around the world to lose their lives, destablised countries and set nasty prescidents.

    As for special interest groups, I can’t speak for the United States, but in the UK (and around Europe) I know many women, ethnic minorities and such like, and they believe in hard work, making a good life for oneself and one’s family, staying loyal to their country and putting something back into society.

    It’s angers me seeing people asking themselves “What can I get out of society?”, but I refuse to be disheartened as I know there are good people who wants to make a change for the better.

    Back on topic, I don’t care what your political affiliation is, if you stand up to protect the laws and money which were entrusted to you by the people, then, that’s good in my book. However, it is a sad state of affairs when someone doing their job, makes headline news!

  • avatar
    Pch101

    You know, win or lose the man is doing what Indiana expects him to do and that is to try and recover our loses and protect our interests.

    Actually, he’s trying to create a lot of drama to disguise the huge mistake that Tipton County, IN and the state of Indiana made with the Chrysler-Getrag factory deal, which blew up in their faces and has cost them millions of dollars.

    That has nothing to do with Chrysler’s bonds, and little to do with the bankruptcy. It has everything to do with Indiana’s apparent incompetence in putting the deal together, including an obvious lack of due diligence that left them holding the bag with costs incurred to build and support a plant that will never open. At this rate, the county may have to file bankruptcy.

    It’s a shell game, and a lot of you are being played. The state has a lot of egg on its face, and the jobs that it promised will not be delivered. They would like to be reelected without being held accountable for that.

  • avatar
    tony7914

    @Pch101 :
    June 4th, 2009 at 10:30 am

    I know the factory your talking about it’s on US 31 about a half hour drive from where I live, very nice looking building if you ignore the plywood on the doors. It was supposed to be a fuel efficient transmission plant that the first units rolled out the door in 2009 and would employ about 1200 people already laid off or out of work in the Kokomo area. http://www.indianaeconomicdigest.net/main.asp?SectionID=31&subsectionID=64&articleID=34547

    Chrysler abandoned the project over financial disputes with Getrag in 2008 after Tipton county had already borrowed and spent money for sewage and water plants to service the factory leaving Tipton county in the hole 3M, the state is going to do whatever it possibly can to recover those losses which is exactly what we expect them to do. Chrysler and Getrag are both in bankruptcy reorganization so the state is looking into possible securities fraud in that case. http://www.indy.com/posts/fraud-inquiry-targets-getrag-venture-in-tipton-county

    Tipton county is right next to Howard county where there are three Chrysler transmission plants and one Delphi plant left which provided jobs for about a 4 county area including suppliers which by the way have been dwindling away for the last two decades.
    Do me a favor and don’t try and tell me about this area unless you live here, I’ve spend most of my life here watching this place slowly fade away because of zombie car makers and bad policies at both the federal level and the local level.

    Tipton county as well as Cass, Miami, Howard, and others close by were heavily dependent on GM and Chrysler and their suppliers much like Detroit is, Tipton has been in a bad way just as long as the rest, maybe more so, so anything that might promise some recovery of our investment is a plus here.

    I agree the state has egg on it’s face, bottom line, we got fu*ked, and not by our government, that’s what we get for trying to help and trusting a zombie, the man is doing what he is expected to do if he didn’t do everything possible to recover something, he would be out of office in a New York minute.

    Many of us are trying to make things different here, pushing to repeal the repeal of right to work laws, get rid of union and zombie supporting politicians, and diversifying the manufacturing base away from automotive like Warsaw has, but it ain’t easy when you live this close to the ghost town formerly known as Detroit and we do the best we can with what we have.

    As far as incompetence goes, that’s funny because we are still doing better than many states out there, we still have money in reserve and haven’t had to raise income taxes or cut education and services yet. That could change tomorrow but at least we live within our means and have a bit more breathing room than many other states for now.

  • avatar
    Pch101

    I agree the state has egg on it’s face, bottom line, we got fu*ked, and not by our government

    You’re kidding yourself. The government entered the deal relying upon the representations of one party (Chrysler) as to the deal’s status, instead of requiring commitments from both parties and having a due diligence process that would have uncovered the problem in the first place.

    No, they blew it, and it would behoove the taxpayers of your state to understand that your government’s poor negotiations and badly structured contracts set the stage for this to happen. They are so eager to tantalize you with the prospects of jobs that they failed to account for the risks associated with such a deal. Don’t pass the buck to Obama, this problem is homegrown.

  • avatar
    tony7914

    @Pch101 :
    June 4th, 2009 at 12:54 pm

    Didn’t think you lived anywhere near Tipton but thanks for your opinion.

    Regardless of anything else our guys are doing what we expect them to do to recover as much as possible any way they can, we see nothing wrong with that. If our officials did anything inappropriate we will take care of that to in time.

    No one here is “passing the buck” to Obama we are trying to recover what we are owed by Chrysler which is what the people of this state want and expect from our government, Obama just happens to be the guy calling the shots right now with Chrysler.

    The appeals court will make a decision soon and we will go from there.

  • avatar
    Pch101

    Didn’t think you lived anywhere near Tipton but thanks for your opinion.

    Forgive me, but a ZIP code doesn’t make a bad deal any better.

    You should be demanding accountability from your leaders for putting that together. They must be relieved that at least one resident won’t be doing that. Apparently, their plan to bamboozle the citizens must be working.

  • avatar
    geeber

    Pch101: They are so eager to tantalize you with the prospects of jobs that they failed to account for the risks associated with such a deal.

    Which is why a lot of us are against this sort of thing.

    Perhaps you can come to Pennsylvania and explain this to a few state politicians. They need to hear it from an impartial source.

    Don’t pass the buck to Obama, this problem is homegrown.

    I didn’t vote for the man, but this certainly is not his fault.

  • avatar
    tony7914

    @Pch101 :
    June 4th, 2009 at 1:59 pm

    “Forgive me, but a ZIP code doesn’t make a bad deal any better.”

    Very true but it does make understanding the area and it’s economy and politics a lot easier.

    “You should be demanding accountability from your leaders for putting that together….”

    Who says we aren’t or haven’t been?

    “They must be relieved that at least one resident won’t be doing that….”

    I’m sure there are those who could care less but I don’t know any of them to be honest about it.

    “Apparently, their plan to bamboozle the citizens must be working.”

    Ok, it’s your story stick to it bro. We will do what we have to do here.

  • avatar
    agenthex

    agenthex, perhaps when it is YOUR property or wealth or investment which is diluted by fiat, you’ll change your tune.

    I can assure you that I have some sense of dignity, and wouldn’t squirm like an idiot just to cover my ass.

    Though to be fair to them, they seem to be winning in the court of public opinion who are just looking for any excuse to hate on the new admin.

  • avatar
    agenthex

    Our actually having a basis for believing that there is a real right & wrong, rather than “situational ethics” is where we differ.

    You are right, there is objective truth, and it’s exactly what is being dispensed here. Many people however don’t like the truth because it may very mean they are dead wrong. For example, those claiming any law was violated by the gov.

    If you are interested in the truth, watch this case carefully, try to get a hold of transcripts/opinions, and learn a tad about the law. Then you will find that truth and become a better person.

    Remember to report back your findings should you choose the path to enlightenment.

  • avatar
    Pch101

    it does make understanding the area and it’s economy and politics a lot easier.

    That isn’t the issue. The specific locality in which the mistake occurred isn’t the point.

    The problem ultimately lies with whomever negotiated the terms. They should have never closed on the bonds without firm commitments from both parties, and without a firm agreement between the other two parties.

    Instead of securing those agreements, they took Chrysler’s word. For a reason that is inexplicable, they issued the bonds without basic stuff that any reasonable deal would have included:

    Before the public legal battles began, a bond purchase agreement was made September 15, 2008, for Getrag and Chrysler to each receive $5.5 million in bonds issued by Tipton County based on their expenditures for the project. Those bonds were issued September 16.

    One day later, Chrysler advised Getrag that it would not provide the assurances that Getrag had requested to enable Getrag to obtain debt financing for the project, according to papers filed in the Getrag bankruptcy and the litigation between Chrysler and Getrag. Chrysler’s refusal to provide the requested assurances caused Getrag to send a “Failure Notice” advising Chrysler that Getrag could not obtain the necessary financing.

    http://www.insideindianabusiness.com/newsitem.asp?ID=34263

    That’s simply astounding. Who decided to issue the bonds before they had a financing commitment that was obviously a make-or-break component of the transaction? Surely, there must have been somebody on Indiana’s side of the table who should have known that.

    I’d be looking at your election cycles to figure out whether there is a connection between the decision to pull the trigger on this and on who was on the November ’08 ballot. Someone might have wanted to have some bragging rights before the election, even though they were clearly not deserved.

    Perhaps you can come to Pennsylvania and explain this to a few state politicians. They need to hear it from an impartial source.

    These sorts of deals can be totally reasonable if they are properly structured. Clearly, this one was not, and now they want to shirk responsibility for screwing up royally.

  • avatar
    tony7914

    @Pch101 :
    June 4th, 2009 at 2:42 pm

    *sigh*

    “In the early stages of the project a commitment agreement dated May 3, 2007, spelled out terms of the parties’ relationship. Tipton County agreed to provide certain incentives to Getrag and Chrysler, and Chrysler and Getrag agreed to a number of obligations, including agreeing to notify Tipton County if the two automotive manufacturers were ever unable to reach complete agreement on the cooperative development of the project. If the two parties failed to reach complete agreement, Chrysler agreed to be responsible for reimbursing Tipton County for any and all third-party costs incurred in the project.

    Before the public legal battles began, a bond purchase agreement was made September 15, 2008, for Getrag and Chrysler to each receive $5.5 million in bonds issued by Tipton County based on their expenditures for the project. Those bonds were issued September 16.

    One day later, Chrysler advised Getrag that it would not provide the assurances that Getrag had requested to enable Getrag to obtain debt financing for the project, according to papers filed in the Getrag bankruptcy and the litigation between Chrysler and Getrag. Chrysler’s refusal to provide the requested assurances caused Getrag to send a “Failure Notice” advising Chrysler that Getrag could not obtain the necessary financing.

    Chrysler’s court papers allege that Getrag should have obtained financing no later than June 2008 and that Getrag’s failure to obtain the financing breached the parties’ agreements.

    Neither Chrysler nor Getrag advised Tipton County before the bonds were issued that the parties were not in complete agreement on project development, that the necessary financing had not been obtained or that critical aspects of their agreements were not fulfilled or finalized.

    “Their own legal papers suggest that Chrysler was aware of the lack of a complete agreement well in advance of Tipton County issuing the bonds. In those papers, Chrysler alleges there was a breach by Getrag of the terms of the parties’ agreements, but Chrysler failed to notify Tipton County of those circumstances,” said Ken Ziegler, Tipton County Commissioner….”

    http://www.insideindianabusiness.com/newsitem.asp?ID=34263

    We had an agreement, they didn’t honor it and Chrysler shirked it’s responsibilities under that agreement.

  • avatar
    tony7914

    @agenthex :
    June 4th, 2009 at 2:30 pm

    “Though to be fair to them, they seem to be winning in the court of public opinion who are just looking for any excuse to hate on the new admin.”

    Obama didn’t have much of anything to do with this other than what he’s done since he took office which is questionable at least, no one in Indiana’s government is hating on the Obama administration over this we just want what is ours and will do whatever it takes to get it back. Is that really so wrong?

  • avatar
    Pch101

    We had an agreement, they didn’t honor it and Chrysler shirked it’s responsibilities under that agreement.

    You don’t comprehend the problem here.

    Let’s say that you are the state, whom we’ll call A. You have Getrag, whom we’ll call B, and Chrysler, who is C.

    A wants to do a deal that requires the cooperation of B and C. A needs not only to worry about the relationship between itself and the other two parties (A-B and A-C), but also about how the other two are agreeing with each other (B-C).

    For this to work, B and C needed to agree on a critical point. But instead of demanding proof that B and C were on the same page, A acted prematurely.

    Had A not jumped the gun, there would be no problem here. But instead, A did all kinds of stuff on the presumption that B and C would get their act together, all because C made a promise.

    That just wasn’t very bright. You don’t put yourself out on a limb by relying solely upon C, particularly when C and its chairmen have reputations for playing dirty in the trenches. You should have all your ducks in a row before proceeding.

    Obviously, A (the county and state) were eager to have this thing move forward before it was ready. Why? I suspect that you won’t like the answer, if you bother to go figure out what it is. Don’t act like a guppy if you want to swim with the sharks.

  • avatar
    tony7914

    @Pch101 :
    June 4th, 2009 at 3:25 pm

    I have a great deal of respect for you because you seem to be very reasonable, intelligent, and level headed.

    Perhaps I am not being clear enough, I am not disagreeing with your analysis of the deal itself, if it was wrongly worked out the government and the voters here will deal with those responsible for that.

    We had a commitment agreement dated May 3, 2007 that spelled out the terms of the parties’ relationship and they broke it, as I am not a lawyer or have half the alphabet behind my name I don’t know how binding this agreement is in court but what I do know is that the local and state governments have a responsibility and a duty to recover as much of our investment as possible regardless of whether the deal was done the right way or not. To do so is not wrong and it’s what we expect out of our government regardless of who is at fault. That is my argument.

  • avatar
    Pch101

    We had a commitment agreement dated May 3, 2007 that spelled out the terms of the parties’ relationship and they broke it, as I am not a lawyer or have half the alphabet behind my name I don’t know how binding this agreement is in court but what I do know is that the local and state governments have a responsibility and a duty to recover as much of our investment as possible regardless of whether the deal was done the right way or not.

    That’s true, and on a certain level, I don’t blame the state at all for using whatever tactics it can to represent its side of the story.

    All I am pointing out is that (a) your leadership in Indy is trying to use this to blow smoke and evade responsibility and (b) it would serve the interests of the local voters to figure out why and how this was screwed up so badly.

    That sort of incompetence needs to be attacked at the source, and a politician looking to become governor should not be exploiting his government’s error to gain a personal career victory just because people don’t understand it. The taxpayer should be pursuing Chrysler, Getrag and the state and county for what each of them has done to wrong them.

  • avatar
    tony7914

    @Pch101 :
    June 4th, 2009 at 4:40 pm

    “All I am pointing out is that (a) your leadership in Indy is trying to use this to blow smoke and evade responsibility and (b) it would serve the interests of the local voters to figure out why and how this was screwed up so badly….”

    I understood those points several posts ago, as far as I know at least with some of the folks I know people are asking questions and asking for this stuff to be looked into. It will happen I’m sure, the others aren’t home free either yet but I think it’s wrong to suggest we shouldn’t try to recover what belongs to us and just take it in the backside when we feel we are being done wrong. Or that we are motivated by hate for doing so.


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