President Obama couldn’t discuss Chrysler’s problems without taking a swipe at the company’s bondholders.
At his noon address, President Obama took a tough stance against what he described as the small group of “speculators” that had held up the Chrysler restructuring. The bankruptcy proceedings are “designed to deal with those last few holdouts,” Obama said.
My, how he sounds like Franklin Delano Roosevelt, who waged his own war on capitalism. Either Obama really believes that living up to a fiduciary responsibility is evil, or he’s the most opportunistic politician since FDR. Either way, Chrysler’s (non-TARP recipient) lenders weren’t about to take this lying down and they have released a statement defending their position. They stated that they offered to take a “40% haircut” even though other groups lower down the legal chain were being offered better deals.
Our offer has been flatly rejected or ignored. The fact is, in this process and in its earnest effort to ensure the survival of Chrysler and the well being of the company’s employees, the government has risked overturning the rule of law and practices that have governed our world-leading bankruptcy code for decades.
We have a fiduciary responsibility to all those teachers, pensioners, retirees and others who have entrusted their money to us. We are legally bound to protect their interests. Much as we empathize with Chrysler’s other stakeholders, the capital is just not ours to contribute to their cause by accepting a deal that is outside the well established legal framework and cannot be rationalized as being commercially reasonable.
We are continuing to discuss our position with the United States Treasury. We have made a proposal which we earnestly believe is fair and would appropriately recognize our legal position.
Chrysler’s stakeholders are seeing the writing on the wall. Ace of Spades summed it up perfectly: “The really important story is the contempt with which Barack Obama speaks of capitalism.”
“We have a fiduciary responsibility to all those teachers, pensioners, retirees and others who have entrusted their money to us.” and “the capital is just not ours to contribute to their cause.”
THANK GOD somebody said it. The left won’t GET it, but at least somebody said it. That was a nice middle finger.
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