Arguments in favor of anonymity for the Non-TARP Chrysler lenders never particularly convinced us. Whatever else may be true about the bankruptcy process, it should be a public one. It is interesting, however, that what was once 20 members, became 5 once disclosure became an issue. If there is an argument in favor of anonymity it is likely buried in that bit of trivia. Clearly, there is a chilling effect at work here. What does it say about the integrity of the process that holdouts who believe they are being treated unfairly, and are using legal means to lodge their protest scatter for cover when their exposure is threatened. Again: When it became clear that the exercise of their legal dissenters rights would be made public, 15 members withdrew their objections. Nothing about the fundamentals of the deal has changed in the last 48 hours.
Frightening.
Who is left standing?
The members include three funds associated with Schultze Asset Management; Stairway Capital Management; Oppenheimer, which holds debt in two funds; Group G Partners, which has holdings in two funds; and Foxhill Capital Partners.
By opposing the Obama administration’s out-of-court debt restructuring plan, this group of holdout creditors has found themselves in the national spotlight. Last Thursday, as Chrysler filed for bankruptcy protection in New York, President Obama criticized the holdouts as “speculators,” even as the creditors argued that they were being treated unfairly under the government’s plan.
If you needed a clear demonstration that this process is tainted, we believe you now have it. Given this, you should be very wary of anyone who calls this result a “victory.”
Meet The Chrysler Holdouts [DealBook]
The funds here violated their fiduciary duty by trying to oppose a plan backed by entities with unlimited billions of dollars and the presidential bully pulpit.
Loomis Sayles did the right thing today by getting out of GM debt.
I am frightened by the bullies of the left.
Shitting on bankrupcty laws is the new “killing it”
From Shultze website:
“We seek to exploit inefficiencies and mispricings due to issuer distress across a range of corporate securities”
I guess the exploitation didnt go so well this time.
-C
4 here…bankruptcy
damn fat fingers
I’m glad these guys are standing up to the White House. By refusing to cooperate with a bully government they are forcing these liberal central planners out from the dark conference rooms and into public courtrooms giving everyone a transparent look into what socialism means.
Scary stuff my friends…
@ 7
thanks, mccain.
Man, this is a joke. Chrysler is insolvent and the Govt provided the DIP – therefore, they make the rules!!! Thats the way it works. The new money controls the outcome in a bankruptcy. If all these “holdout” firms wanted a voice they wouldnt have allowed themselves to be primed by the DIP. The only “scary stuff my friends” is that most of the so called self proclaimed sophisticated/fiscally conservative/free marketers dont have an f’ing clue how bankruptcy works. If the DIP wants to take care of the employees or management thats their call – they are first in line and own the outcome in a situation like Chrysler because it is worthless without the DIP….
if what is going on with how the debt holders are being handled is so illegal and an egregious affront to bankurptcy legal precedent, how come the non-TARP debtholders aren’t in front of a judge winning their case? isn’t there an entire bankruptcy court established just for this type of thing?
What’s frightening about this? Enough of this paranoia.
What you don’t know is the real reasons the other holdouts vanished. Really, you don’t know.
Can we speculate that the holdouts have less than clean interests in a fair resolution of the Chrysler bankruptcy because of conflicts of interests? That’s where my money is.
Do you want the administration come out and say what it knows about it? I don’t think so. You rather be frightened.
@9: The Feds gave them an interest free DIP and probably an interest free exit loan.
Which bank/PE/HF is going to lend them billions at 0%?
The dissidents are squaring off against entities that have other interests in mind besides the fate of their capital. The government is making DIP loans it fully intends never to be repaid.
That’s obviously a better outcome for Chrysler LLC than liquidation, and the bankruptcy judge is making the correct calls. What I don’t understand is why the lenders didn’t appreciate this fact
13, that’s precisely the point. No bank/PE/HF is able to offer a better deal than the government.
The bankruptcy process here isn’t the issue. The issue is that the duly elected US government is fine with giving away its capital to Chrylser because it wants to save jobs and industry. Take that out with your Congressmen
@12 Don’t forget the prior government loans have been declared principal-free.
8 – You would be better off with a government job. LEAVE THE WORLD OF BANKING!
@5 FTW
@13
But I think that’s exactly the problem with this bailout. Obama is doing it with no intention of recovering any of the investment. No one else would ever put up that kind of money at those terms.
So the govt is throwing away 70% of the bondholders investment (and 8-12bn of the taxpayers money) and then basically giving the company to fiat and the UAW, that just doesn’t make sense to me.
Not too mention this sets a horrible precedent for the kind of solution we can expect when GM is on the wire at the end of the month where the stakes are a lot higher.
Regardless of whether it is right or wrong to screw the senior sec’d…does anyone seriously think this UAW/Fiat/US Congress/Canadian Gov’t stepchild will still be operating in three years?
Obama Portfolio update!
@18
This is a multiparty deal so everyone in it is giving up something. That’s more fair than one group running away with a bounty. I do believe it’s in the public interest to transform Chrysler to a viable company. It’s very risky, but it’s better than the alternative of letting those jobs evaporate forever at the worst time possible.
On other “news,” expect the NFP numbers this Friday to be quite better than -620K.
EP = Kira Argounova
@8: McCain would never say something that intelligent.
@9: There is no DIP yet, and even being primed by the soon-to-be DIP doesn’t justify the fucking hand-out to the very labor who worked so hard (with mgmt, of course) to kill this shitty company.
@13: The judge has responsibility to more than just the rotting carcass of Chrysler LLC, the UAW, or both. The instant the USG decided its prior money was a gift, his responsibility to the USG also got demoted.
TED had an excellent discussion of the matter on Sunday, but while it’s unreasonable for the senior debt to be repaid at par, it’s fucking ludicrous how badly they’re being treated here.
And no, I hold none of the debt.
Extortion doesn’t like publicity.
Pls can someone tell me what FTW means?
For the win?
Fk the world?
Fat topless women?
More info on Whitehouse bully tactics:
http://www.washingtonexaminer.com/politics/White-House-puts-UAW-ahead-of-property-rights-44415057.html
The best way to object to this is to boycott union made products to the greatest extent possible. When unions are given legal rights outside the accepted rule of law, the people need to fight back and do so meaningfully.
For the time being, we have no control over the actions of our government and we cannot expect the courts to uphold the rule of law, so we have to fight back by other means.
Boycott all union made products!
@25
For The Win… (facepalms)
19 FTW
This is a near-guaranteed disaster. All we need to make it completely guaranteed is to AFSCME involved. Or just hire the injection molding designers from Pontiac. THEN it would be a guaranteed disaster
EP will be hosting a “comfort circle” this evening for all those whose feelings have been hurt by the words of Obama.
Please arrive promptly at 7:30pm for a quick drink and hor d’oeuvres.
At 8pm, guests will gather in a circle to take turns fucking themselves in the ass with a black rubber cock, screaming: “Why is he doing this to me?” and “Somebody stop him!”
9pm, a quick cry-session and some opportunity to network.
Cheap wine will be provided. Please bring your own lube and towels. And no, you can’t use her shower.
so the UAW contributed more than the hedge funds and banks?
@30: You should fuck yourself, I think.
If I were starting a fun today, I’d make sure that at least 0.001% of the funds came from war widows, retarded kids or some similarly sentimental demographic. PR FTW!
If I were starting a fund today, I’d make sure that at least 0.001% of the funds came from war widows, retarded kids or some similarly sentimental demographic. PR FTW!
BTW, old Jimmy boy did a very effective job of keeping his “little investors” out of the market, even when the prez said “I would buy stock” and then he turned on a dime and those “little investors” have to scramble to get in at best. since old jimmy has now declared there is no going back. how does he sleep at night?
@27 – Americans have been boycotting union products for years. It’s called “not buying overpriced stuff that breaks down three times as often as any other product.”
None of this has anything to do with pounding Becky Quick in the ass in the green room at CNBC.
Hands off the Malibu bitches, I just got it detailed!
If you should be very wary of anyone who calls this a victory EP you can be wary of me all you want.
Read “you realith, of courth, that thith meanth war” over on The Epicurean Dealmaker and count me straight in, along with
#9-12 and #30. Who do you want to blink, the POTUS or some weenies from hedge funds?
And I agree. You started the First Analyst Portfolio, keep on with it.
http://www.businessinsider.com/henry-blodget-elizabeth-warren-wake-up-wall-street-the-world-has-changed-2009-5
oops sorry was posting that to the other blog which looks remarkably similar to this one.
EP, I have to distance myself from #’s 9-12, & 39.
Can we just agree that one post per day would be sufficient?
I mean really, this post is so bad Anal_yst didn’t even bother leaving a comment.
It’s 9:15, so now that we’ve cried a bit, let’s all towel off and do some networking!
-30
There is no dark side of the moon. Matter of fact, its all dark.
@25 Free The Weed
If I were the bondholders, I’d be selling out and just take the hit to the funds. Then I’d sit back and watch the government, union, and Fiat make an even more complete mess of Chrysler than it currently is (no, not impossible). Karma is a bitch.
It’s going to be awfully interesting when the second P disappears from the PPIP
@45 – I suppose that’s why you’re not running a bond fund, dumbass.
Karma is not distributable to fund holders.