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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.
They went to court didn't they?
All that 'strong-arm' talk is nothing but anti-Obama propaganda. The admin made an offer, which the lenders turned down. Now they will get another offer from the court, which will probably be worse than the admin offer. The lenders tried to play a bluff, and the bluff was called. Now they will lose some money. Tough luck.
When underwriting risk a shareholder/speculator/bondholder (s) will often times insure the risk of their capitol by insuring the secured creditor position and possibly have the funds privately insured. Either way, as an investor I would never sacrifice my risk, my investment, my money and my senior creditor position .... for a junior position behind the UAW. I am entitled to be satisfied and not OBAMA AND NOT THE GOVERNMENT AND ESPECIALLY NOT THE UAW. This is what is so horrific in having Government intrusion and Cram downs. My money... my risk... my payback.... my decision.... NOT Obama's.
A "shareholder" cannot insure the risk. An unsecured creditor is just that... unsecured. Bondholders obviously have priority over shareholders but they are not secured. All a secured creditor means is that they get first priority and are normally paid out in a bankruptcy context before other creditors.
Here, you had taxpayers spend Billions of dollars to help bail out an important industry. In order to properly reorganize, a bunch of interests had to renegotiate their standing positions. The government facilitated and got most folks to decrease their rights in order to save the institution. You then had a group of hedge/vulture funds who have no interest in having the company continue to exist because they made an economic decision that they would get paid better if the company is sold off. So, the company is now in bankruptcy and the fate of the company will be decided by the trustees and bankruptcy judge. What is unconstitutional about this? The creditors can decide to stick with the deal they reached or everything can fall apart... however, the vast bulk of the creditors realize that they will fare better off in the long run if the company survives.
Did the government try to twist arms? So What? If my tax money has already been spent trying to save this institution, then I don't want a handful of funds to stop the actual rescue of the company. This is not unconsitutional -- this is negotiation. Let's stop with the hystrionics and just think. This is just another example of pure Obama hate. I can imagine the articles had Obama allowed a handful of rich hedge funds to get a sweetheart deal... you guys are not serious.
It depends on the judge and the plans. Often times once a company files bankruptcy they receive a .Q status on the market, they become penny stock until a judge decides how much each stock share is worth. Those investors will often be issued new stock with the old stock being worthless.
This however is not the situation with Chrysler because Chysler is privately owned by Cereberus Capital Management (80.1) and Daimler A.G. who owns (19.9%)
Thanks for the info, I should have realized that Crysler was no longer traded, probably hasn't been since the MB days. I'm concerned becasuse I do own some GM common, wondering how badly I'll be screwed on that.
All that 'strong-arm' talk is nothing but anti-Obama propaganda. The admin made an offer, which the lenders turned down. Now they will get another offer from the court, which will probably be worse than the admin offer. The lenders tried to play a bluff, and the bluff was called. Now they will lose some money. Tough luck.
It is obvious you are not aware of the case.
Obama tried to forestall Chrysler going to bankruptcy court with a deal brokered by his administration - in which he intended to screw the senior investors in favor of the UAW. When some of those senior investors balked at such a "deal", they were threatened by the administration with the lap-dog press doing his dirty work.
In bankruptcy court, the deal will be customary and proportional in regards to the creditors.
Let me just ask you; Don't you see ANYTHING wrong with this statement?
Quote:
The admin made an offer
Since when does the constitution give the executive branch authority to broker deals between a private entity and their creditors? On top of that, to threaten, bully and extort their way to a deal.
Nothing about that bothers you?
Can you say the same if a republican administration were doing this?
I missed the memo that they relinquished their share.. You got me, woo hoo, way to show me.. Now sit there and pretend that it changes the facts posted. Someone took over their 19.9% share..
Cerberus absorbed the remaining shares of Daimler A.G.
A "shareholder" cannot insure the risk. An unsecured creditor is just that... unsecured. Bondholders obviously have priority over shareholders but they are not secured. All a secured creditor means is that they get first priority and are normally paid out in a bankruptcy context before other creditors.
Here, you had taxpayers spend Billions of dollars to help bail out an important industry. In order to properly reorganize, a bunch of interests had to renegotiate their standing positions. The government facilitated and got most folks to decrease their rights in order to save the institution. You then had a group of hedge/vulture funds who have no interest in having the company continue to exist because they made an economic decision that they would get paid better if the company is sold off. So, the company is now in bankruptcy and the fate of the company will be decided by the trustees and bankruptcy judge. What is unconstitutional about this? The creditors can decide to stick with the deal they reached or everything can fall apart... however, the vast bulk of the creditors realize that they will fare better off in the long run if the company survives.
Did the government try to twist arms? So What? If my tax money has already been spent trying to save this institution, then I don't want a handful of funds to stop the actual rescue of the company. This is not unconsitutional -- this is negotiation. Let's stop with the hystrionics and just think. This is just another example of pure Obama hate. I can imagine the articles had Obama allowed a handful of rich hedge funds to get a sweetheart deal... you guys are not serious.
What do you mean "So What?" The gov't is trying to move the UAW to the head of the line of creditors. They are supposed to get 55% of the company - more even then the feds are getting Why? BECAUSE THEY GIVE VOTES AND MONEY TO THE PARTY IN POWER. You don't find that disturbing?
The UAW is entitled to squat. Their pensions should go to the PBGC and they should be SOL on healthcare. Harsh? Yeah, but they are the ones who helped kill the golden goose with their above market demands for wages & benefits.
Instead the feds are stepping in and trying to browbeat the secured creditors to cede their place in line to the UAW. Why? Again - BECAUSE THE UAW GIVES VOTES AND MONEY TO THE PARTY IN POWER.
Would you find it ok if the feds came in and browbeat you sell your home for less then fair market to give someone else a specail price? Maybe because that someone gave the politicians running the gov't campaign contributions? You'd be ok with that?
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