Chrysler vs. Debtholders: Who Will Win?

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Comments

[sethmcs:]

Mistreating bondholder will not work. A fair proposal would have been accepted. Look at Ford's debt swap and look at Ford's stock price.
The government should lose some of its investment in this bankrupcy as a penalty for stupid policy. Why should the UAW or the gov't get any stock? My thinking is the bond holders should get it all.

May 01 09:55 AM

[MellowGuy:]

There is too much long term debt in the hands of bond holders, Just let them own the company after other creditors have been paid.

May 01 11:01 AM

[Mike Kuenning:]

Yes we are. It would appear that totally free markets can lead to chaos as greed runs wild. It may be time to re-regulate so we don't risk the entire economy for the benefit a few.

May 01 11:11 AM

[ex GM emp:]

"Debtholders which are fund managers were only doing their fiduciary duty, which is to maximize returns for their investors." Yeah, we sure wouldn't want them to get less than a dollar on the dollar for the quarter on the dollar they invested. Gimme a break.

May 01 07:35 PM

[john s. gordon:]

"debtholders who are fundmanagers" don't seem to care about the damage they intend to do to the nation at large.
> jack

May 02 08:45 AM

[a. palmer jr.:]

I think the bondholders are doing exactly the right thing. Why should the union which is one of Chrysler (and GMs) problems benefit, let alone the government which should have kept their nose out of it. The government took care of Chrysler a few years ago only to now see it fail again. After this current fiasco is over I don't see Chrysler doing any better because people want a more responsible vehicle for driving to work than a 550 horsepower hemi powered 4 wheel drive 4 door Ram pickup...(Boy, though, wouldn't something like that or a Z06 Corvette have been great in the early 60's!!)

May 02 09:18 AM

[a. palmer jr.:]

Sorry I left Ford out....the 550 horsepower Mustang KR would have been just as fine!

May 02 09:19 AM

[Teutonic Kn...:]

This whole saga is bizarre to me.

Government should have no business in getting involved to this extent in private business enterprise to begin with. Such an act is fundamentally contrary to our nation's founding principles of free enterprise.

The risk of the government loan is too speculative and wide open to further handouts. I bet the "emerged" Chrysler would just come back stretching out its hand for another couple of $B, and another couple of $B before it is all over.

As with any prudent investor (and the government had never proven itself to be one in my opinion), the way to go in such situations is to cut your losses. Instead, the Obama regime is getting itself deeper and deeper into the hole. My only explanation is his rewarding his union buddies.

May 02 12:42 PM

[Gregman2:]

The debt turned out to be a risky proposition for the bond holders. They now have little recourse legally. Anyone who has been a creditor in a bankruptcy proceeding knows that you're screwed--only the lawyers and accountants (and employees) get paid. This is just part of doing business. Ultimately the bond holder losses will be charged off, and they'll be able to carry their losses forward for 3 years and that will be it. The fact is, he who owes is king, and there's really very little recourse.

May 02 01:08 PM

[shootpar2001:]

Since this your first comment; I will be kind.
There is no such thing as totally free markets, in an organized (Gov't) society. The influences and regulations are everywhere.
Yes, regulation lags the marketplace; that's how innovation comes about and yes there are excess'. Again that is why we are still the innovator for the world. The opportunities for the 'entire' economy are non-existant without 'big' opportunities for the 'few'.



On May 01 11:11 AM Mike Kuenning wrote:

> Yes we are. It would appear that totally free markets can lead to
> chaos as greed runs wild. It may be time to re-regulate so we don't
> risk the entire economy for the benefit a few.

May 02 01:57 PM

[shootpar2001:]

If that is all they invested.
Remember; somebody had to originally pay the entire dollar at first issuance. The pension funds (maybe yours) are long term holders
(mostly to maturity) and usually buy at issuance.



On May 01 07:35 PM ex GM emp wrote:

> "Debtholders which are fund managers were only doing their fiduciary
> duty, which is to maximize returns for their investors." Yeah, we
> sure wouldn't want them to get less than a dollar on the dollar for
> the quarter on the dollar they invested. Gimme a break.

May 02 02:00 PM

[robertc39:]

Who will loan these companies money in the future. Bond holders expect to be paid, before others. Looks to me like our president is paying off unions. I know that I will not throw good money after bad.

May 02 04:29 PM

[henarl:]

This is a case of the long established rule of law vs the political expediency of trying to escape a systemic risk. One would hope that the bankruptcy court will remain true to it's constitutional mandate and favor the former.

May 02 06:11 PM

[nova:]

Our society is rapidly moving to a fascist state when Rules of the Law are subjugated to the Government dictate.

American people are stupid enough thinking that US government dictate will be limited just to the auto-industry. This was exactly the same thinking German business had supporting A. Hitler. Hitler has promised and delivered the labor tranquility. Unfortunately for German businesses, for Europe and the world, it did not stop there.

We do know the rest of the story but American people are too ignorant to even think about it.

Obama actions are the first step to a totalitarian society in America. If America legal system does not stop Obama assault on our democracy, the game is over for American!

May 02 08:46 PM