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Apr. 30th, 2009 | 01:51 pm
“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” —Ronald Reagan
DESPITE THE FACT THAT THE AUTO WORKERS UNION MADE LITTLE OR NO CONCESSIONS TO HELP AVOID THE IMPENDING CHRYSLER BANKRUPTCY. THE “LITTLE GUY”, THE SMALL SHARE HOLDER IS GOING TO BE THE ONE WHO CAUSED CHRYSLER TO FALL INTO BANKRUPTCY!
Government mandates that were put in place to placate environmentalists, that put a strain on the design and manufacture a competitive car to bring to the world market will not be mentioned. And thee outrageous demands on Chrysler by it’s union will not be mentioned by the President when he speaks at noon today. After all the UAW spent millions to get him elected!
The bad guy is the stock holder who did not want to accept pennies on the dollar for the stocks and bonds. While the Union and Obama get to run their company.
Big banks and foreign lenders would be protected, but the share holders would be left out in the cold. Sooo! The stockholders choose to take their chances before a bankruptcy judge, like any other company not involved with political fat cats or big unions would normally do if a company failed.
From Times Online April 30, 2009 we learn this about the impending bankruptcy
“White House confirms Chrysler will go bankrupt
Christine Seib in New York and Robin Pagnamenta (Source)
“Chrysler will declare itself bankrupt today, White House officials confirmed, after last minute talks with the carmaker’s smaller lenders broke down late last night.
President Barack Obama, accompanied by members of his car taskforce, will make a statement on the issue at noon today.
White House officials said that the carmaker had the full support of its stakeholders, including its largest lenders and union.
An Administration official accused Chrysler’s smaller lenders of “failing to act in either their own economic interest or the national interest” but added that Chrysler now had an opportunity to restructure and “emerge stronger going forward”.
He said: “After a month of tireless negotiations, the Administration went into yesterday afternoon with the full support of Chrysler’s key stakeholders, including the United Auto Workers (UAW) and the largest creditors. That support remains.”
The bankruptcy filing comes after the breakdown of talks with Chrysler’s smaller lenders. They had refused to write off their share of Chrysler’s $6.9 billion debt. Chrysler had offered $2 billion in cash in return for the debt being written off, which was accepted by the four largest lenders — JP Morgan Chase, Citigroup, Morgan Stanley and Goldman Sachs.
The US Treasury last night sweetened the offer to $2.25 million, but some of Chrysler’s 42 smaller lenders, including a number of hedge funds, refused the deal.
A group of 20 renegade lenders, which control about $1 billion of Chrysler’s debt, said today that they were forced to conduct negotiations with Chrysler and the Treasury though the four big banks, which the smaller lenders described as “obviously conflicted” because the banks had taken billions of dollars in Government bailouts. My comment is why are these people called “renegade”. All they want is a fair return on their investment!
The lenders, who said that they had not taken a dime in bailout cash, said that they had been willing to write off 40 per cent of their debt, accepting considerably less than was being offered by the company to more junior creditors.
“Our offer has been flatly rejected or ignored,” the lender group said. “The Government has risked overturning the rule of law and practices that have governed our world-leading bankruptcy code for decades.”
But senior Administration officials described the lenders’ claims as completely untrue. All lenders received direct communications and were able to participate in the same repayment offer, officials said. My comment on this; Is why should we believe Obama’s spinmasters on this subject when we have been lied to so many times in the last one hundred days?
The Treasury has prepared for Chrysler to enter a brief “surgical�� bankruptcy that avoids liquidating the company. They never wantr to give up their strangle hold on the auto makers in Michigan, so they can dictate that they make “green type” cars!
Details of Chrysler’s tie-up with Fiat, the Italian carmaker, are expected to be outlined today .
A quick bankruptcy would allow Fiat to pick and choose the assets it wanted from Chrysler without taking on some of the company’s liabilities and underperforming businesses. These will once again be assumed by the Obama administration for the “RUBE” taxpayers whom already have a 13 trillion dollar debt oppressing them!
Where will it end, and when??????