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Car Czar
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Private Equity
Steve Rattner’s Quadrangle To Shut Down, Reinvent Itself Under A Name Not Associated Fraud Allegations
By Bess Levin
Steve Rattner, the former car czar and founder of Quadrangle Group, just got run over by his former firm.
After settling this morning with Andrew Cuomo and the SEC., Quadrangle issued a statement saying “we wholly disavow the conduct engaged in by Steve Rattner, who hired the New York State Comptroller’s political consultant, Hank Morris, to arrange an investment from the New York State Common Retirement Fund. That conduct was inappropriate, wrong, and unethical.” Damn that’s harsh. Continue reading »
Why does General Motors take it up the tailpipe? You could probably come up with at least handful of reasons, but at a breakfast hosted by Fortune this morning, Steve Rattner wanted to highlight one in particular. Over bagels and lox, the retired Car Czar, who last month was finally able to get it off his chest that automaker’s PowerPoint presentations were for shit, said that the higher-ups took no responsibility for their action and spent most of their time smack talking the “competition.”
On Rattner’s conversation with former GM CEO Rick Wagoner when he told him he was fired: “The most curious part of it was that after three to four minutes of chit chat he asked ‘Well are you going to fire Ron Gettelfinger too?’…And I said, ‘Look I’m not in charge of firing Ron Gettelfinger’… One of the problems with GM is that they blame everyone but themselves for their problems…But the fact is, Ford is doing OK and there is no reason why GM had to be in this position.”
Also, don’t talk to him about socialism.
“…an administrator, provisional liquidator, conservator, receiver, trustee, custodian, or other similar official for it or for all or substantially all its assets.” Sound like the Car Czar to anyone? Yes. Us too. Know what else it sounds like? The 2003 ISDA credit derivatives definition sufficient to trigger CDS default provisions. Does the mere appointment of the Car Czar trigger them? Should it?
Bank of America has been back-and-forthing on this for a pair of days now, first opining, “yes,” then “no” to the question of the week.
There is much wrangling about the details of the bailout bill wording and its impact on this question, but, at least to our way of thinking, the spirit of things, no matter the exact text, sounds more than enough like an “administrator, provisional liquidator, conservator, receiver, trustee, custodian, or other similar official” to make quibbling over the details somewhat pointless. Of course, this will be sidestepped without even the slightest hesitation.
We are the bailout. Resistance is futile.
CDS may be triggered by autos czar, says Bank of America [Creditflux via Alea]
Autos bailout bill unlikely to trigger CDS contracts, says Bank of America [Creditflux via Alea]
CNBC Claims That The White House Claims That A Big Auto Bailout Deal Has Been Reached
By Equity PrivateOk, so Joe Kaplan is yammering in the White House Press Room via CNBC, I guess that makes it true. His yammering includes:
Firms must meet an “economic definition of financial viability” (can’t wait to read that).
They have to prove it by March 31 (can’t wait to see how this is evaluated).
If they don’t meet the requirements funding gets cut off, the gubment gets its grub back.
Discuss….
Your favorite bailout and ours looks to be on the eve of a vote. True, roadblocks (if you will forgive the term) remain, like the Democratic complaint that firms should stop suing states with individual emission laws (seems a bit brash to force this to us, but we are due process hawks, unless Spitzer is at issue). As is typical, some Democrats are already claiming an accord has been reached, contrary to the comments of Republican colleagues.
And then there is the idiocy provision of the decade:
In addition to providing loans, the proposal would force automakers to answer to a presidentially appointed trustee — or “car czar” — and make the government their biggest shareholder.
The overseer will have powers to shape a restructuring of the companies, withholding further loans if progress toward a turnaround stalled.
A key provision would permit the czar to recommend a bankruptcy restructuring if companies borrowing money fail to obtain the necessary concessions.
When is the last time a “Czar” did anything of note besides starve Russians or die in glorious revolution?
Bailout plan could soon face House vote [Reuters]
