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What do you want to bet those that bought the debt for $.13 accepted the $.29 and those that paid $.50 did not..
Some win, some lose does not mean its legal or fair..
It is what it is. Investing has never been fair. Legal? Sure, why would it be illegal? Buy low, sell high.... Some make good moves, some make bad.
Quote:
Perella and Xerion issued a statement yesterday after the president’s comments saying they accepted the government offer and would attempt to persuade other lenders to do the same.
Perella Statement
“We believe that this is in the best interests of all Chrysler stakeholders, and our own investors and partners,” the Perella statement said. “We are working with other non-TARP Lenders to encourage broad participation in the settlement.”
Goldman Sachs Group Inc. was among the first of Chrysler’s underwriters to try to get the loans off its books. The investment bank sold about $500 million of Chrysler loans in April 2008 at 63 cents on the dollar, almost 30 cents lower than where other actively-traded loans were selling. At that price, the loans would yield more than 25 percent if held for four years.
“People bought the debt because the recovery on bank loans has been high,” said Steven Persky, co-founder of Dalton Investments LLC, a Los Angeles-based hedge fund that trades distressed debt.
It is what it is. Investing has never been fair. Legal? Sure, why would it be illegal? Buy low, sell high.... Some make good moves, some make bad.
Its illegal depending on the TYPE of debt investors bought.
You cant take an unsecured creditor and give them priority over a secured creditor. There is a reason why secured creditors take lower returns, its because they are entitled to priority over debt in the event of failure.
You cant take an unsecured creditor and give them priority over a secured creditor. There is a reason why secured creditors take lower returns, its because they are entitled to priority over debt in the event of failure.
That's why there is such thing as Bankcrupcy Court, where they make sure the law is followed.
Yes, according to the customary practices of proportion between senior and junior investors.
This is not what obama and the UAW want, which is why they tried to strongarm and threaten those investors into making a deal instead of going to bankruptcy court.
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