Can someone answer this question:
If a company takes out a loan that is guaranteed by the federal government, and then the company goes bankrupt, is the federal government on the hook for paying off the loan? Or does it depend on the covenants of the loan guarantee?
In the case of the Obama loans to these firms, the taxpayers are unsecured creditors. The taxpayer makes the original lender(s) whole...including interest, and then assumes responsibility for the balance of the debt including the cost of the dissolution of the firms assets.