Quote:
Originally Posted by Bucco
Secured creditors -- entitled to first priority payment under the "absolute priority rule" -- have been browbeaten by an American president into accepting only 30 cents on the dollar of their claims. Meanwhile, the United Auto Workers union, holding junior creditor claims, will get about 50 cents on the dollar."
I feel like I should add this to the thread on Unions becoming stronger and stronger, empowered if you will, by their large investment !
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The only "fairness" test that the bankruptcy judge must apply is to determine whether those secured creditors will get as much from the government's proposed reorganization plan as they would from selling off the company in pieces. It shouldn't take a judge more than a few weeks to conclude that 30 cents on the dollar is the best they're going to do.
http://www.washingtonpost.com/wp-dyn...s=rss_business
Obama "threatened" the bondholders that they would do worse in a chapter 11 than what the government was offering them before chapter 11. The bondholders didn't believe that. No one knows who is right at this point.
The hold-out hedge funds had purchased the debt paper from banks and pension funds for as little as 11 to 16 cents on the dollar. They were looking for a big payday.
http://online.wsj.com/article/SB124199948894005017.html