SPECIAL POST
I haven't really been fond of Justice Ginsberg's rulings in the past, but I feel compelled to give congratulations and recognition where it is due.
The Justice has issued a restraining order in the sale of Chrysler to Fiat. She is showing due caution over the sale, as she should, because it is a sham.... a criminal act perpetrated against the bondholders of Chrysler. In fact, if you or I tried to accomplish this sham.... we'd be in Guantanamo with the terrorists.
In straight bankruptcy, the assets are sold and fully secured creditors get paid first. Second on the list are bondholders and they get paid full bore unless the money runs out first. Then, the rest of the investors, stockholders, unsecured creditors, etc.... get paid. In the case of Chrysler, the federal government arranged for a new shell corporation into which Fiat invested. The "shell" was worthless until Chrysler filed bankruptcy and, under court supervision, all of the assets of Chrysler were moved into the shell corporation, leaving Chrysler with a pile of debt and no assets.
The bondholders got the total shaft.
Geithner and Obama turned a deaf ear to the many pension funds that had invested in Chrysler bonds. They obviously don't care if those nearing retirement get the shaft. Various court rulings upheld the move until.... Justice Ginsberg issued a stay and gave the opposing parties an opportunity to file briefs and state their arguments.
She was right to do so.
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