Chrysler Bankruptcy WTF?

[Ratickle]

Can anyone here explain the bankruptcy papers presented by Chrysler? I looked at the entire package, and it looks to be as illegal as heck to me. They are giving the retiree trust fund 55% of the company as an unsecured creditor and the secured creditors about $0.20 cents on the dollar? And the secured creditors include banks like Chase, who were solicited to buy the loans for Chrysler by the government?

Isn't the entire package illegal under US bankruptcy law? I cannot for the life of me figure out how the Union is privy to any of the assets, let alone 55%.

I mean, as a secured creditor under law you have first rights to the assets before any unsecured creditor, right? And Chryslers assets are about $35 billion on about $55 billion in total debt, (I believe, hard to figure the entire thing out).

 

[MarylandMark]

Chrysler owes $10.6 billion to the VEBA (voluntary employees' beneficiary association).

Chrysler is giving them stake in the company in the form of stock (but only 1 chair on the Board of Directors) instead of the cash (since they don't have any).

If/when Chrysler becomes profitable the UAW will dump the shares to pay in to the VEBA. Smart move for Chrysler- now the UAW has to keep the company alive (vs strong arming Union'ing them) if they want their retirement benefits.

Company succeeds all is well; company fails all those workers will be on our dime (Medicaid/Medicare) vs Chrysler's.

My 2 cents? Obama had them do this so when (not if IMHO) Chrysler fails all those workers are on the national health care plan which means they will be voting for a better one and the Dems dream of a nationwide health care (I prefer the term health Scare because it will be scary!) will be realized.

 

[phragle]

it's all perfectly legit under Obamanomics...... 10 to 1 those papers were concieved in a room with Obama's people present with input.

 

[Ratickle]

I understand what and why, (I think). But isn't it totally against bankruptcy law? Secured creditors come first, and the Union retirement fund is an unsecured creditor.

 

[sledge]

Haven't read anything myself but just guessing: a secured creditor can always forgo their status. Since BO owns the banks he tells them to let it go. Chances are the banks were at least partially protected with CDS (probably issued by AIG) so they'll be made whole by us.

 

[Ted]

Also factor in that Chrysler's largest liabilities are benefits to employees and retirees, the company was basically way in te negative because of that, now the unions are way in the negative.

 

[BBB725]

Can anyone here explain the bankruptcy papers presented by Chrysler? I looked at the entire package, and it looks to be as illegal as heck to me. They are giving the retiree trust fund 55% of the company as an unsecured creditor and the secured creditors about $0.20 cents on the dollar? And the secured creditors include banks like Chase, who were solicited to buy the loans for Chrysler by the government?

Isn't the entire package illegal under US bankruptcy law? I cannot for the life of me figure out how the Union is privy to any of the assets, let alone 55%.

I mean, as a secured creditor under law you have first rights to the assets before any unsecured creditor, right? And Chryslers assets are about $35 billion on about $55 billion in total debt, (I believe, hard to figure the entire thing out).

Just playing politics and repaying the people that got him elected.

 

[Sea-Dated]

Just playing politics and repaying the people that got him elected.

:iagree::iagree:

 

[Tommy Gun]

Just playing politics and repaying the people that got him elected.

So much for "change you can believe in". What a hypocritical joke this guy is.