Tuesday, December 22, 2009

Chrysler stiffs the US

One has to love karmic payback when it arrives. Though this time it will make every taxpayer pucker their lips as if they just sucked a lemon.

Back when TARP and the US Government was tossing $4billion at Chrysler to keep the derelict company running, a group of secured creditors stood up against the creative reorganization the Treasury Department was forcing on Chrysler. They were dismissed out of hand by the legal system while more junior unsecured creditors, like the UAW, were paid in full. Recently the US Supreme Court ruled on those creditors' suit. The Court upheld the sale of Chrysler to a new company under Fiat aegis but ruled the 2d Circuit ruling that allowed it moot; which erases the precedent of unsecured creditors being paid off before secured creditors.

Which leads us to the latest piece of business news from Chrysler's battle to stay afloat. Now called the Old Carco, the rump company is paying off creditors by selling what assets are left after the forced sale of its more valuable assets to Fiat. The first creditors being serviced are secured creditors in keeping with established bankruptcy law. It seems the $4 billion from the US Treasury is of an unsecured variety, so the taxpayer will not be receiving any payment.

Now tell me again these guys running the Treasury are among the brightest.


AndyJ said...

They ARE the brightest. I'll probably pick up my Turbo Tax this week. I hope that I don't get the faulty ones that Turbo Timmy got, I'd hate not to pay tax for a few years. And Anna, it's not only the dopes at the treasury, it seems like the whole government is being run by incompetent idiots. It must be a new government program...HIRE THE IDIOTS.

Tom said...

"The best minds are not in government. If any were, business would steal them away." - Ronald Reagan

Although I do sometimes think that some of the idiots that were running GM and Chrysler drove those companies into the ground.

Funny that the word verification came up with "ruinest" - odd, it is...

Anna said...

AndyJ, there are so many non-PC comments I want to make. Like is the Obama Admin hiring purely under Americans with Disabilities guidelines on pathological liars and cheats? Seems that way.

Tom, you can speak with more authority on the auto screw-ups than me since you were in the trenches. I guess no one on either side of the negotiation table ever throught there would be a sharp line that marked consumers' last offer on quality, reasonable cost, and decent wages.

Ruinest? LOL Yeah this Administration is busily sowing salt over the fertile fields of capitalism.

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