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So how do you guys feel about the Chrysler secured bondholders getting screwed?

Discussion in 'BBS Hangout: Debate & Discussion' started by robbie380, May 28, 2009.

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  1. SamFisher

    SamFisher Member

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    well yeah, it's called negotiation, that's what happens in negotiations. If they threatened to waterboard the debtor, then that's illegal, if they drove a hard bargain and got what they wanted then that's something different.

    No, that's not my argument at all. It was Paulson's argument.

    You guys need to read the complaint/motion.
     
    #41 SamFisher, May 28, 2009
  2. JuanValdez

    JuanValdez Member

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    I don't think it is a simple matter of secured vs. unsecured. Employees are in line ahead of secured debtholders. You have to pay them their compensation before you repay debts. If they negotiate a deal giving up some of their compensation guaranteed in their union contract, it's not unreasonable to give them some priority in the bankruptcy in return.
     
    #42 JuanValdez, May 28, 2009
  3. robbie380

    robbie380 ლ(▀̿Ĺ̯▀̿ ̿ლ)
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    because they have collateral put up against the bond in the event of a default. unsecured bonds do not have collateral put up against them.
     
    #43 robbie380, May 28, 2009
  4. deepblue

    deepblue Member

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    Where did you read that? And compensation owed to employees is not what the UAW is getting.
     
    #44 deepblue, May 28, 2009
  5. pgabriel

    pgabriel Educated Negro

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    edit: didn't state that clearly
     
    #45 pgabriel, May 28, 2009
    Last edited: May 28, 2009
  6. deepblue

    deepblue Member

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    Its doesn't matter who deserves more, its a contract states secured bondholders are entitled to the underlying collateral which was used to secure the loans in the event of default. While unsecured have no such guarantee.
     
    #46 deepblue, May 28, 2009
  7. robbie380

    robbie380 ლ(▀̿Ĺ̯▀̿ ̿ლ)
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    i hate to answer your question with a question but why does the UAW deserve 72% more than the secured bondholders if they are behind them in the pecking order? unsecured bond holders are normally not paid a dime until the secured holders are fully paid back. i know they aren't liquidating but i am pretty sure the govt is restructuring the value of the debt to 29 cents on the dollar. there was 6.9 billion in secured debt which is now only worth 2 billion under the govt deal. the UAW received 50 cents on the dollar for their unsecured debt. i am trying to find the total value of the UAW's debt holdings.


    edit...i :p at your ninja edit!
     
    #47 robbie380, May 28, 2009
  8. rockbox

    rockbox Around before clutchcity.com

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    That's the question I have. Would the bond holders been better off if the government never would have gotten involved and let the company fail and liquidate? If the answer is yes, then I think the bond holders have a gripe and I don't agree with it at all. If answer is no, then its just a money grab and the union grabbed first and hardest.
     
    #48 rockbox, May 28, 2009
  9. JuanValdez

    JuanValdez Member

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    I'm just spitballing. It is true employees come before bondholders. I'm just trying to point out that this is a more complicated case than you're making it out to be.
     
    #49 JuanValdez, May 29, 2009
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