Chrysler and coercion
Over the weekend, news broke about the Obama administration’s reported threats against an investment firm that opposed its union-friendly Chrysler bankruptcy plan.
Tom Lauria represents a few of the non-TARP Chrysler creditors. He reported the threats on WJR radio host Frank Beckmann’s radio show in Detroit:
Zero Hedge summarizes and surmises:
In an interview of momentous importance, WJR’s Frank Beckmann interviews Tom Lauria, the Head of Restructuring at top five law firm White & Case, in which the lawyer, who represents Chrysler hold-out hedge funds Stairway Capital and Oppenheimer Funds, discusses on the record the amazing treatment by the White House of Perella Weinberg, which initially had been a transaction hold out but after threats by the White House (not my words) was forced to drop their objection and go with the administration. Says Lauria:
“One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight…That was Perella Weinberg.”
…The full interview with Tom Lauria below is a must hear for everyone as it discloses not only the administration’s strong arming tactics in black and white, but also discloses some other critical facts that the president on his regular TV appearances has failed to mention such as:
- First lien holders were willing to accept a 50% discount on their positions, however the 71% demanded by the administration was seen as too much.
- The cash going to Junior claims (creditors below the first liens) will be between $10 and $20 billion, a number which in practice should satisfy a par recovery for the 1st liens if the Absolute Priority Rule was actually withheld.
- Among the creditors are not just vulturous hedge funds but “pensioners, teachers, credit unions, college endowments, retirement plans, and personal retirement accounts.”In conclusion, Lauria summarizes the developing Chryslerf#%k best:
“The President is trying to abrogate contractual rights; if he will attack that contractual right, what right will he not attack?”
The only surprise is that anyone is surprised. The coercion cow has been out of the barn for a while now.
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Don’t worry! We can rely on the judicial branch to reject such patently unlawful conduct. Oh, wait…
I guess it depends on what the meaning of extortion is!
Michelle,
The implications of this factoid, if true, are staggering. If members of the White House press corps are are directly involved, directly coordinating their message, and are active participants in slandering an innocent American citizen at the behest of the President of th Unites States, then a criminal investigation is more than warranted.
That was also the issue last week when BofA CEO Ken Lewis was attacked by shareholders. TreSec Paulson muscled BofA to acquire Merrill Lynch and told Lewis not to disclose the sad condition of Merrill to shareholders under penalty of having the entire board and top management fired.
A CEO’s first duty is to keep shareholders informed so Lewis was being coerced into abrogating his legal responsibilities. Lewis should have stood his ground and forced the Treasury’s hand.
This spreading fascism can be stopped if those in positions of authority would find the spine to stand up to it. The public needs to be reminded that the Constitution was designed to protect the people FROM the government, not the other way around. Once we surrender that power, it is lost forever.
This is the first time in my life I have actually been afraid of the government!
“When the government fears the people there is liberty;
when the people fear the government there is tyranny.”
Thomas Jefferson
There is another must-read piece about this at the site of an economist once described by our hostess as a formal liberal, John Lott: http://johnrlott.blogspot.com/2009/05/more-abusive-actions-by-government.html#links
According to Lott:
He also points out that Obama carried through on the threat, by disparaging the firm during the press conference. He didn’t name the firm, but I have no doubt that the name would have leaked.
I am, however, very disheartened that Perella Weinberg apparently yielded to the threat when we so desperately need patriots now.
Does anybody think the in-the-bag media will make a squeak about this though?
Errah, I’m sure the bond holders were told by Rahm that Elections have consequennces. When does the new 2010 Chrysler “O” Car get to dealers? I hear the “tool”ing was completed on 1/20/2010. I hope Iaccoca doesn’t come back (from the grave) and do the commercials for it. “If you can find a more socialized car and car company, then buy it!!!” Wonder if any of these bond holders contributed to the “O’s” election or not? How did your first 100 days of socialism go?
I agree, this is, in some ways larger than the Government trying to coerce a bankruptcy to their own idea of fairness. This administration obviously feels confident that the fourth estate will do their bidding. That to me is the story that any reporter worth their salt should be pursuing. The MSM, in their silence in this, are acquiescing that this is the case.
Do you really think the Dem House Judiciary would look into this collusion?
NOPE
Does anyone else have the feeling that we’re not just in the first year of the Obama Presidency…but we’re in the early stages of a dictatorship?
I mean this guy wants his way..on everything. There’s no compromise.
I fully expect that he’ll steal the next election (through ACORN voter fraud…plus 20 million illegal aliens who will by then have citizenship and the right to vote–and who will vote mostly Democratic).
Once he steals the next election…in his second term he’ll start the moves to repeal the admendment that gives Presidents term limits.
This is my nightmare scenario…and one that’s not impossible.
Errah 1/20/2009
Flyoverman, do you know that George Stephanopoulos and a CNN commenter have a scheduled call with the White House every morning?
http://www.worldnetdaily.com/index.php/index.php?pageId=88196
We are now the USSA. Papers, please!
Anyone who watched the press conference regarding this, could see that Obama was very angry that the holdouts forced his hand. In other words, he didn’t get his way. There is no further evidence of his arrogance needed.
Absolutely you’re not alone.
He is now in the process of having congress rewrite legislation that college tuition will be an entitlement and the US taxpayer will pay for everyone’s college tuition.
I just mentioned hearing about this on another thread…I knew MM would cover it! It is now official. The Mafia is running our country.
Yep!
The remarkable thing about this is that the White House was threatening to wield the supposedly-independent White House Press Corps as a mindless weapon, and nobody for a minute doubts that they could do it.
The White House Press Corps has fallen below their traditional Rip-n-Read function to become willing tools of the President. They should be ashamed of themselves.
If they had gone through AIG, they wold have gotten 100% return…Those fools…
sarc
BTW the O’s enemy list is getting longer…
extortion is a chicago tradition, zero’s play ground. this country is quickly becoming a third world entity. a punk playing president, and his lackey’s enforcing what he wants.
RACIST! The words BLACK and white were used inferring it was against Obama. It does not matter the context. It implies Obama is a bully because he’s black. (/sarc)
Obama is angry because he wanted the bankruptcy to be informal thus avoiding much public disclosure. He could have then simply declared success on his own terms. Sensing he was failing, he “knee-capped” certain bondholders while bluffing that the bond holders would get less if it were to go to bankruptcy court. His bluff was called and now the world can see, bad deal or not for the bondholders, what we are dealing with here.
This was essentially stealing. Everyone was in the position they deserved at the bargaining table. The bondholders paid market price for their first lien bonds and had a legal right to their claims. Obama trashed the law and stole Chyrysler to benefit the labor unions and give assets away to Fiat for nothing.
Let’s not bring up the $5B of taxpayer money that was also flushed down the toilet.
We used to laugh at Russia, and how their Kleptocrats were rigging the game to loot the country. The only thing a private investor can make by investing in Russia is a loss. The game is rigged.
Now that same thing is happening here. If you are on the inside, the government is rigging the game to guarantee your profit. Everybody else will be required to take the loss.
these hedge fund guys are enemies of the people just like the Kulaks in the glorious people’s republic of the soviet union!!!
anyone who opposes the ONE is an enemy of the people…and need to be reeducated
power to the people!!!
viva la revolution!!
This is an outrage.
It is also economic suicide.
It may be an impeachable offense.
The drive toward FASCISM has to be stopped.
There is another artical on Dredge about THE One wanting to “deal with the Market” now but limiting growth.
This whole group needs to be recalled RIGHT NOW NOT IN 2010!!!!!!!!
Another example of what goes as hard hitting journalism in the Age Of Obama:
http://apnews.myway.com/article/20090503/D97UV67O0.html
Warning: You might need a barf bag.
It is not impossible that he will TRY. But I doubt he would succeed. There would be armed rebellion before that happens. There are still millions of patriots in this country who will not sit by and let it be hi-jacked by the likes of these thugs. In 2010, we need to find some way to MAKE SURE the election is honest!! Somehow, we can’t let them get away with stealing it. I don’t know how, but it must be done. By then, I believe many people on our side will be running for office and we must make sure they succeed honestly.
Frank Beckman is pretty good, he’s on from 9:00 to noon and you can listen online.
Let’s try a link!
http://www.wjr.net/
But Rags, who will do the impeaching?
This is grounds to impeach the fascist ba**ard.
Dictatorship thy name is Obama.
This action, if proved true, is not just a political power play, it’s literally a crime. A felony, in fact. That would make it a “high crime”, as specified in the Constitution. When is somebody going to raise the obvious question?
See Star Parker’s recent article about The New Capitalism”, “Where politicians rule, irresponsible behavior is rewarded, and theft is legal.”
http://www.gopusa.com/commentary/sparker/2009/sp_05041.shtml
Here is another attack on our rights by the one:
It will be interesting to hear what Rush has to say on the subject. By the way, what are we going to do when Obama and his band of merry thugs decide to shut down internet dissent and radio talk shows like Rush Limbaugh?
Great point, Happy. We couldn’t even get a Republican Senate to convict Slick when he clearly committed a felony. How could we ever expect a Dim-wit-crat house to even vote for the impeachment trial?
They’re all way too busy either wishing they were with him or wishing they were him.
All hail the great “O”
Is it time to polish up my pitchfork yet?
On a related matter, see Star Parker’s article on “The New Capitalism”, “Where politicians rule, irresponsible behavior is rewarded, and theft is legal.”
http://www.gopusa.com/commentary/sparker/2009/sp_05041.shtml
Please excuse the unintentional double post.
Yes, to everything in comment#22. The fact that the creditors were willing to accept 50 cents on the dollar, especially when they had legal right to 100% is immaterial to the One. They would not fall in line and accept what he thought was the ‘fair’ amount of 29 cents. Hence the vilification. The big story, though, is the assumption that he could call on the WH press corps as though they were a branch of his administration. I’m sickened that there has been nary a peep from any of them, excepting Jake Tapper.
Good read……
I could cynically answer, “Elections have consequences”.
The sadly obvious answer is “nobody”.
The PEOPLE need to take this on, and set it right.
At a time when we will need to ENCOURAGE capital to flow into our economy…
THE ONE has just destroyed the entire mechanism, developed over centuries of human experience, that makes capital TRUST investments in the US. We are now Kenya in terms of investor confidence.
Businesses HAVE to be allowed to fail, just as they have to be allowed to succeed.
Unions need to eat the consequences of their excesses.
I had heard such reports. My point is when the press corps actively used to slander a private citizen at behest of the White House, they are now engaged in what is clearly criminal activity.
This is the biggest crisis our Country has faced since the Civil War. I don’t think our Tea Parties, or witholding our taxes, or “voting out the RINOs” or any methods we have discussed are going to work here. I truly think it has gone past the point of polite dissent. They are power-mad, they have the power, and they are corrupt. The few in Congress who disagree have no power whatsoever. And now the SCOTUS will have one more on their side, with possibly a couple more down the road soon. Thus, no more “balance of power”. All three branches will be radicalized and tainted. How do you fight that?
Sure.
The question is who will trust GM with credit after this?
21 cents on the dollar? That will bankrupt half of GM’s suppliers. AT LEAST half of them.
The ALL POWERFUL central government really expresses power only one way, if you take the analysis out to the end.
MONEY.
They can pass all the laws they wish; to have any effect, those laws have to be enforced. That takes MONEY.
It also assumes compliance with the laws…
So, you take both those away.
Civil disobedience HAS to be tried. I think it will work. It has in the past.
BO will resort to any tactic to protect his union thugs!
it only works when you have a basically decent government to go against…when you have a ruthless government…well you see what happens to Putin’s enemies…
y’all ain’t seen nothing yet!
What’s the definition of high crimes and misdemeanors again?
He’s following the Hugo Chavez model to a “T”.
Questioning the ONE.
Correct. But how decent were the authorities in the South during the Civil Rights movement?
How decent were the British in dealing with Gandhi?
Part of what happens is that, with each draconian push-back, more and more ordinary, complacent people come to see the morality and immorality in the respective sides.
That is where the tipping point is reached.
Before we completely jump to conclusions here, it’s worth noting that the actual investment bank who was allegedly threatened has denied the version of events put forth by Lauria, and that Lauria no longer represents them.
Michell Obama-with or without the shoes
J-No
or
Miss Hillary?
Coercion is the mother’s milk of the Fascist-they pride themselves on enemies destroyed and we shall return the favor. There is a New World Order Arrived–so what do we do about it?
What do you you do when you find cockroaches? Cockroaches and Fascist are two filthy critters who do not belong here, there or anywhere- OK, maybe Europe and Chicago.
—
Careful My Friends
And Always
Practice Safe
Right Wing Extremism
you’re right, Michelle. Why should anyone be surprised. This is BHO at his Chicago thug best. He and his strong-arm buddies are no better than the Mafia, i.e., do it my way, or we’ll knee-cap you. May God have mercy on us.
Oh, well, that makes everything alright then. Go back to sleep folks.
compared to who? the soviet union? north korea? Chavez?
So, take a minute and suggest a mechanism that explains why a business would expose itself to HUGE liability from its investors by agreeing to accept less than the law allows them under the bankruptcy code.
I’d like to hear that one…
It’s already in the works, flying below the readar:
111th CONGRESS
1st Session
H. J. RES. 5
Proposing an amendment to the Constitution of the United States to repeal the twenty-second article of amendment, thereby removing the limitation on the number of terms an individual may serve as President.
http://thomas.loc.gov/cgi-bin/query/z?c111:H.J.RES.5.IH:
I have repeatedly e-mailed GM and Chrysler to tell them that I don’t like how they’re letting Obama nationalize them. I’ve just gotten back stock replies.
I like my ’00 Silverado, and my ’04 Sebring sedan. They’re both great vehicles. But I won’t support them if they’re run by Obama.
Why do you take the word of a disappointed lawyer?
meangreenfan said (#10):
I hear they condone torture …. Oh wait, that’s the good guys.
its called a press conference in this administration…
OR ELSE!
Link to the Perella Weinberg denial please.
A good explanation I just heard on the radio:
So now, per Obama’s comments on Chrysler and the “recalcitrant” creditors who don’t want the “deal” the government offers/mandates, if you loan money to someone and then expect them to pay it back, that’s being “greedy”.
As the liberals used to say, welcome to our long national nightmare. Only now it’s true.
Seriously, we are not anything like those cases.
We have a military composed of smart, idealistic, patriotic people.
We have many police agencies composed of the same kinds of people.
We have a vast majority of Americans who are basically decent people.
This is a good place for civil disobedience.
Another ignorant and stupid comment not worthy of debate or reply.
By the way, it is interesting that the law firm not only rebuts the accusations of their lawyer, but has also FIRED HIM (?) So, my take on this is, he got brave, tried to fight the mafia and lost his job. I wonder if that is all he will lose?
not yet..but the direction is clear..
you know, I used to think that..but then we had waco, ruby ridge, elian gonzales, schiavo where the police enforced her starving to death…
GM’s contracts with suppliers already did…Most, anyway…a lot of them had union workers too…UAW, that is. Mine went under last year, non-union but, could not survive having price cuts mandated every year. Along with very slow payments.
I recall an article from a few weeks back in which the writer summarized from some Latin American acquaintances their agreed-upon prescription for the establishment of a Banana Republic. They were, in order:
1. A cult of the Strongman;
2. Nationalization of key economic sectors; and
3. Censorship.
We’ve got all three. The most disgusting part of it all is that the censorship of the Voluntary State Media(TM) is so far largely voluntary. Most anyplace else, the Dear Leader has to muzzle or coerce the press into becoming a propaganda arm.
Here, the media have been all too glad to do it to themselves.
Not to change the topic, but if the Obama admin truly believes the detainees are innocent, then why even bother with a trial? Why not give each of them a new suit of clothes, a couple hundred bucks, and set them free in the USA – if they truly believe they’re innocent?
BTW: That’s an out-of-character retort for you. I don’t recall your ever delving into Coulter-like sarcasm as a response.
scituate_tgr: It’s in the actual article that MM linked to.
http://blogs.abcnews.com/politicalpunch/2009/05/bankruptcy-atto.html
Ragspierre: Are you serious? There are a ton of reasons why an unsecured creditor might accept less than is theoretically possible for them to get under the bankruptcy code. Avoid loss of public goodwill. Avoid the time and expenses of fighting in a bankruptcy proceeding. Improve the possibility that the company successfully reorganizes, and thus the creditor actually gets paid anything.
I think we should, as long as they stay in a blue area, like NYC or DC…let the libs live, and maybe die, with their policies…
lgm,
Give us the name of one enemy prisoner who has been killed, been seriously injured, has a scar, lost their sight, lost hearing, lost any teeth, had a broken bone, or become mentally unstable as a direct result of being interrogated by any American.
If you cannot, then shut up. Just because some idiot says “torture” or “global warming” 1,000 times, does not make it a fact.
This is not a reigious exercise based on Gregorian Chants nor is it a matter of putting on ruby slippers, clicking your heels three times, chanting “there’s no place like home” and then expecting to wind up back in Kansas.
Based on your silence, you obviously approve of the President threatening using willing members of the press to slander U.S. citizens.
Good idea, but let’s put them in San Francisco and force them to watch the famous parades. That would be torture I can believe in!
yes MM this came out over weekend when this blog was dead.
Which seems to be the club THE ONE was using.
OK, I am a bankruptcy attorney, and that would be a factor in your garden variety bankruptcy. It really isn’t when you have BILLIONS in play. Damn, please be real.
That IS NOT the job of the creditors. These creditors, under the code, GET PAID.
Their representatives…funds or funds’ attorneys…are breaching a fiduciary duty if they fail to AGGRESSIVELY pursue the investor’s interests.
IN fact it came out last week when this blog was dead but all that was posted was silly jammie media or hot air links.
Over the last several weeks I’ve noticed, and commented upon, the new, different “edge” to the buffoon poster’s comments.
Since I do not believe in alien body-snatchers, nor in overnight personality changes; I think the most accurate explanation (as I wrote some weeks back) is that the buffoon’s posts are being ghost-written, or that someone else has simply taken over the buffoon’s blogname.
Well put. And that is exactly what the radical left is trying to do…change the truth into a lie and a lie into the truth. And millions of lemmings are just following the lies over the cliff. ONLY THE TRUTH WILL SET US FREE!! We do have our work cut out for us, don’t we?
I may be wrong, but it sounds like you are chastizing our hostess. Did I read you wrong? Or are you suggesting she work 24×7?
Rags,
very good it has already been said a thousand times.
MM is still busy and the blog is dead do we really need to rehash old news to get her clicks?
Cmon MM you are better than this.
Dilawar
Ummm…I wonder how many of these debts were purchased for 10 cents on the dollar as KMART’s were which gave the new owner majority control ? Amazing how KMART ended bankruptcy, realized their real estate was worth millions and bought Sears…I thought those creditors got hosed in bankruptcy. And, they were trading K’s stock during the process too…
Chicago-style thuggery at work. Lovely.
happy,
I am calling her out on being lazy to her blog yes. Many other blogs if busy say as much they don’t provide links to other blogs they have financial interest in or rehash old news and act as if it is new.
I am sure MM is a big girl and can handle my opinion.
IMO K’s bk was fraudulent because they undervalued assets…Though, Sears holdings ain’t a great investment nowadays…
Bans…too cryptic. What’s been said…???
As can we all…
Jeff,
as a reminder Sears picked up kmart for the value of their real estate not thier biz model. Sears is in deep ahem now as that RE has tanked in value.
The Main Stream Media LOVES Obama, and they will do whatever he asks of them.
As for Lauria being threatened with the White House Press Corps… How would YOU like Helen Thomas camped out in your front yard?
And one last thing for everybody to ponder : WHEN ACORN finishes “Helping” with the 2010 Census, how many more Democrat Districts do you think there will be? Personally I do not Trust them, and the Republican Party is in dire straits in the future.
Rags,
I am not going to copy and paste and respond to each line you said and type it has already been said. Your entire post has is that specific enuff?
If I’ve said it once, I’ve said it a thousand times: Obama is a fascist.
Rags,
I shall repat myself for your benefit:
this is old news MM is mailing it in.
capiche?
cmon gang 4 more and we got MM 100 clicks on this old news shall we got for 200? she needs a new pair of cheap shoes for this friday
I didn’t…wouldn’t…ask for you to do anything of the kind. As I know you know.
And, no, you were still obscure.
Just tell me how I have offended you by repetition, please.
No cigar. Keep trying. This prisoner’s death in 2002 resulted in criminal charges against three members of the 519th MI Battalion, who were all convicted.
Thus, it was a war crime, neither ordered nor condoned and the U.S. Army took care of it.
Eddie Lampert bought up Kmart debt, after bankruptcy kmart bought Sears.