Hepcat-in-Chief Obama lost a bit of his storied cool yesterday in attempting to blame a group of recalcitrant hedge funds for the failure of the Chrysler deal his apparatchiks were working out. This is nonsense, and a lawyer for the hedge funds got it right with this statement:
"It sounds like people are being bullied right now," said Ron Geffner, a partner at the law firm Sadis and Goldberg, which represents hedge funds. "To play the 'I stand with Chrysler, I stand with families, I stand with the dealers, I stand with the consumers' -- that's great conceptually, but . . . I stand with the fact that we live in a capitalist society where companies who don't modify their business plans and stay current die and go by the wayside."
We are a nation of laws, not men. We have laws that govern the orderly dissolution of businesses, and those laws speak to how debt is retired. The senior debt holders (in this case, the hedge funds) will be paid out before any of the simple equity holders, and that is as it should be and as it has been under settled bankruptcy law. For the President to seek to stick it to the hedge funds so that bloated unions and ineffective managers can continue to conspire to run a bad business (with government as a full partner) strains credulity.
What we have before us is a bankruptcy case, and it should proceed accordingly. The President's demagoguery on the matter is not helpful, and it continues to bolster his growing reputation as anti-business.
Friday, May 1, 2009
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6 comments:
Still think he's going to let them fail?
Isn't going into chapter 11 failure?
Referring more to GM, but also the billions the feds will spend to guarantee Chrysler warantees.
Would you want to buy a Chrysler manufactured after May 3, 2009?
It will also be interesting for Ford to have UAW for a competitor. Should make for some interesting contract negotiations.
The senior debt holders (in this case, the hedge funds) will be paid out before any of the simple equity holders, and that is as it should be and as it has been under settled bankruptcy law. Is it really? If so, why? Honestly I have not reviewed the law, but why gives them the priority?
"anti business"? you sound like an advocate of the circa 1900 robber barons. Damn the unions... conservatives may loathe unions, however, conservatives have a history of supporting the oppressor -- slave holders, Joe McCarthy, anti civil rights, and etc…..
Good comments from GG.......always informative, humble and insightful.
When you sell your assets to a competitor (Fiat) it is not called success.
God bless America,
Land that I love,
Stand beside her and guide her
Thru the night with a light from above;
To paraphrase "He turned out the light the party's over".
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