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 [...]

  • TheMrFreeze That new Ferrari looks nice but other than that, nothing.And VW having to put an air-cooled Beetle in its display to try and make the ID.Buzz look cool makes this classic VW owner sad 😢
  • Wolfwagen Is it me or have auto shows just turned to meh? To me, there isn't much excitement anymore. it's like we have hit a second malaise era. Every new vehicle is some cookie-cutter CUV. No cutting-edge designs. No talk of any great powertrains, or technological achievements. It's sort of expected with the push to EVs but there is no news on that front either. No new battery tech, no new charging tech. Nothing.
  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
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