Bankruptcy

More on Chrysler

By mcbride

The attorney for some of the bond holders in Chrysler, Tom Lauria, (once a co-worker of mine) has pointedly stated that the White House has threatened his clients in order to get them to ?go along? with the deal which the Treasury Dept. and in particular, the car czar panel (no one car czar was appointed, but a panel) had proposed for them.  The White House has denied the claim. ?Left-wing bloggers have been saying that the White House?s denial of making threats should be taken at face value and that Lauria?s statement is not evidence to the contrary. But that?s ridiculous. Lauria is a reputable lawyer and a contributor to Democratic candidates. He has no motive to lie. The White House does.

Think carefully about what?s happening here. The White House, presumably car czar Steven Rattner and deputy Ron Bloom, is seeking to transfer the property of one group of people to another group that is politically favored. In the process, it is setting aside basic property rights in favor of rewarding the United Auto Workers for the support the union has given the Democratic Party. The only possible limit on the White House?s power is the bankruptcy judge, who might not go along.

Michigan politicians of both parties joined Obama in denouncing the holdout bondholders. They point to the sad plight of UAW retirees not getting full payment of the health care benefits the union negotiated with Chrysler. But the plight of the beneficiaries of the pension funds represented by the bondholders is sad too. Ordinarily you would expect these claims to be weighed and determined by the rule of law. But not apparently in this administration.?

This story ?has legs? as they say in the journalism business, as it ? perhaps for the first time ? points out that while the general public seem oblivious to the increasing power of the federal government, such power may be simply illegal should the matter ever get to a Court of law.  And in Chrysler?s filing of chapter 11, that may now be the case.  Hopefully, the Judge will follow the law.

Michael

Full post as published by Texas Lawyer Blog on May 06, 2009 (boomark / email).