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 [...]

  • Kwik_Shift Hyunkia'sis doing what they do best...subverting expectations of quality.
  • MaintenanceCosts People who don't use the parking brake when they walk away from the car deserve to have the car roll into a river.
  • 3-On-The-Tree I’m sure they are good vehicles but you can’t base that on who is buying them. Land Rovers, Bentley’ are bought by Robin Leaches’s “The Rich and Famous” but they have terrible reliability.
  • SCE to AUX The fix sounds like a bandaid. Kia's not going to address the defective shaft assemblies because it's hard and expensive - not cool.
  • Analoggrotto I am sick and tired of every little Hyundai Kia Genesis flaw being blown out of proportion. Why doesn't TTAC talk about the Tundra iForce Max problems, Toyota V35A engine problems or the Lexus 500H Hybrid problems? Here's why: education. Most of America is illiterate, as are the people who bash Hyundai Kia Genesis. Surveys conducted by credible sources have observed a high concentration of Hyundai Kia Genesis models at elite ivy league universities, you know those places where students earn degrees which earn more than $100K per year? Get with the program TTAC.
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