Posted on 05/04/2009 6:43:37 PM PDT by Starman417
Just two days ago, No Quarter, a handful of blogs and a thimbleful of major media caught on to the Chrysler holdout firms' attorney, Tom Lauria, and his accusations that Obama's auto czar, Steven Rattner, threated to destroy P-W's reputation if they continued to oppose the government orchestrated sell out of Chrysler to Fiat SpA.
Perella-Weinberg has a stake in Chrysler via their Xerion [Capital] Fund. Chrysler, itself, is currently owned by Cerberus Capital Management LP. Try to keep all these names straight... these players are going to continue to reappear, along with some others you may not know about.
Per Law Shucks, and via Andrew Sorkin at the NYTs Dealbook, Lauria added more detail to that threat in a follow up interview with Jake Tapper.
In a follow-up interview with ABC News’s Jake Tapper, [Lauria] identified Mr. Rattner, the head of the auto task force, as having told a Perella Weinberg official that the White House “would embarrass the firm.”
It's no surprise that the WH denied the event ever took place. And yesterday Perella-Weinberg issued their carefully parsed statement as well.
Suggestions have been made that the Perella Weinberg Partners Xerion Fund changed its stance on the Chrysler restructuring due to pressure from White House officials. This is incorrect. The decision to accept and support the proposed deal was made by the Xerion Fund after reflecting carefully on the statement of the President when announcing Chrysler’s bankruptcy filing. In considering the President’s words and exercising our best investment judgment, we concluded that the risks of potentially severe capital loss that could arise from fighting this in bankruptcy court far outweighed any realistic potential upside.We have a very specific mandate from our investors, and that is to carefully weigh investment risks and rewards. It is not our investment mandate to pursue political or risky legal campaigns with our investors’ money. This was our assessment of investment risk and reward, nothing else.
While we did and still do believe that the lenders would be justified in pressing their objections under conventional bankruptcy law principles, we believe a settlement would now be in the best interests of all parties in the context of avoiding a drawn out contested bankruptcy litigation proceeding, and we encourage our colleagues in the loan syndicate to pursue this immediately.
Note very carefully, Perella-Weinberg spokespersons have not denied the charges of White House strong arming. Instead, in no uncertain terms, P-W has chosen to use the promise of heavy litigation costs .... with a questionable outcome... as their reason for a change of heart. Surely they would have known this before signing on to the lawsuit. Could they be this under-informed at the onset?
History... plus their choice of legal representation, belies this possibility. Lauria has been in this same spot for his clientele before with a previous decision in Adelphia Communications.
Here the bankruptcy judge refused requests by Lauria, representing first lien holders, to appoint a trustee to oversee disputes, and to disqualify a chief Adelphia bankruptcy counsel. The bench considered this a "nuclear war button" threatening obliteration of a crucial $17.6 billion deal, selling Adelphia's assets to cable rivals, Time Warner and Comcast.
Key to the judge's decision was that a failed sale due to delays could incur higher costs in penalties to Adelphi, and that the assets could be sold prior to the creditor challenges to the planned reorganization by using Section 363 of the US Bankruptcy Code under Chapter 11.
In the same vein, Obama's orchestrating a forced asset sale to what will be a government and union owned company, Fiat SpA, prior to Lauria's Chrysler claims being heard.
(Excerpt) Read more at Flopping Aces ...
More on Richardson’s pal Rattner.
Cerberus, which is run by the reclusive Stephen A. Feinberg, stands to lose a bundle on Chrysler. In the past (and likely still) Feinberg worked closely with J. Ezra Merkin who was another big plunger. Merkin, it is reported, is under indictment for his involvement with Bernie Madoff. Connect the dots and two things become clear: The New York investment circle was very small and very powerful; second, some former wealthy billionaires are no more. Another aspect of this business: Rattner knows all these guys, and they know him.
BUMP! BUMP!
the UAW will own 55%, and the US government 10%. That is, as Mata said, (and I quote) “what will be a government and union owned company”. 65% of voting power will equal dominate voice.
* If any lawsuit is filed it will be deemed "frivolous" and the attorney cited.
* An Italian company and the UAW...what might they have in common?
In the same vein, Obama’s orchestrating a forced asset sale to what will be a government and union owned company, [55% to UAW, 10% to government/secured lenders] known as Fiat SpA, prior to Lauria’s Chrysler claims being heard.Right now, it is planned to be a joint stock held company (which is what SpA means, BTW) between Fiat SpA (no existing in the US now) and the Chrysler asset owners... UAW eventually 55%, government/secured lenders 10%, and Fiat SpA 35%.
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