Anonymous
Anonymous asked in Politics & GovernmentPolitics · 1 decade ago

Remember the "evil bondholders" that Barry demonized on the Chrysler deal - (the fightfighters and teachers)?

they have filed an injunction and the SCOTUS will here their case today - thoughts?

Did this administration put UAW ahead of the firefighters and teachers who legally should have been first?

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    I hope the law is upheld, and the contracts people made are honored.

    No matter who they are, if the bankruptcy somehow cheats the bondholders then people will no longer feel safe investing and America's economy will suffer untold damage.

  • 1 decade ago

    both the GM and Chrysler bankruptcy 'deals' seem to violate establish law in their treatment of the non-union creditors.

    however, the courts can solve this by separating the asset side of the the cases from the ownership side.

    For Chrysler, this would look like moving ahead with the Fiat deal on the asset side and holding the terms agreed with Fiat while having the lower courts rule on the competing claims of the various parties to the 80% of the resulting company that will not be Fiat owned.

    That this may result in the UAW controlled retiree's health fund not becoming the 55% owner, but only the 30% owner [or whatever the courts rule based on established law] is a tolerable outcome.

    And this would leave plenty of room for the secured bondholders [the Indiana retirement funds are among these], who were promised first crack at the value of the assets that secured their bonds AND that their value not so recovered would be treated equally with the other unsecured creditors.

    More difficult is the case of the warranty holders for vehicles sold prior to the bankruptcy filing. Imo, honoring those warranties is crucial to the future of the company and therefore the warranties must be upheld as a liability of the new [revised, 20% Fiat owned] company. I suggest the mechanism of a warranty trust to be initially operated by the bankruptcy court. The trust would receive a portion of all sales revenues and would pay out on warranty service work as required; with the past liability being an obligation of the new Chrysler Group. {It would require little cash funding, however, if deposits from new vehicles sold grow to match the payouts on older vehicles' warranty work.]

    There is also the issue of the dealerships which will be cut off. Imo, since the remaining dealers will benefit from this move, the old dealers should be compensated by the remaining dealers on a basis to be determined by the bankruptcy court. [the remaining dealers will be "unjustly enriched" by having their competitors' franchises arbitrarily jerked.]

    The GM case has some similarities and some differences -- to be discussed at a different time.

    Source(s): mba/cpa and Detroit native.
  • 1 decade ago

    Yes,

    It is going to be tough because Justice Ginsberg is bias against private enterprise.

    Yes. This is the UAW political payoff for helping King Obama.

    DTG

  • Anonymous
    1 decade ago

    The UAW was a major contributor to Obama's campaign fund. Firefighters and teachers can't afford to line the usurpers pockets.

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  • Lady B
    Lv 5
    1 decade ago

    The Administration did put the UAW ahead and that is wrong.

    Isn't it funny how the Liberal Media isn't educating their viewers on this.

    Let's see what happens..... Thank you for bringing this to light!

    The POTUS is wrong by interfering and this will hurt him.

  • Fred K
    Lv 6
    1 decade ago

    the teachers and Firefighters should be mad at the People they have investing there money Buying in to the auto Industry has not been wise for the last 10 years and not getting out even more unwise

  • Anonymous
    1 decade ago

    Obama's attempt to bully and threaten bondholders and subvert the operation of the independent judiciary is directly in violation of the separation of powers clause of the Constitution. Obama should be removed from office.

  • C.S.
    Lv 5
    1 decade ago

    The Supreme Court will not hear their case today.

    The Supreme Court will decide if that want to hear their case.

    Regardless, they will side with Chrysler on this one: it was a completely legal transaction they did to avoid bankrupcy.

    And maybe 1/10th of the Bondholders are teachers or firefighters...and you know it.

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