Posted on 10/09/2012 5:42:35 AM PDT by equaviator
From the “how’s that for irony” file comes a report that the judge that signed off on the GM bailout has been having second thoughts, because — surprise, surprise, surprise — he wasn’t informed about part of the deal.
The Washington Free Beacon reports:
As GM teetered on the edge of bankruptcy in June 2009, it cut a $367 million “lock-up agreement” with several major creditors in order to prevent its Canadian subsidiary from going under. The move spared the subsidiary from fulfilling the $1 billion debt it owed the creditors—major hedge funds—ensuring that GM would not have to face bankruptcy courts in two nations, which could have delayed the company’s recovery.
The trustee for (old GM) creditors shortchanged by the government-driven bankruptcy are now suing the hedge funds in a move that could undo the bailout.
“Many U.S. creditors waived their rights to object because the government wanted to push through the bailout for political reasons,” risk analyst Chris Whalen said. “If they had continued through normal channels, they could have easily been in bankruptcy for five years. So they made sure these issues were not adequately briefed before the court.”
The GM that exited bankruptcy was radically different than the one that entered. The Treasury Department arranged for the company to split into Motors Liquidation Co., known as “old GM,” and created a “new GM” with the help of $30 billion from American taxpayers. Judge Robert Gerber, who approved the sale with little hesitation, could now reverse the entire auto bailout—and overturn one of President Barack Obama’s signature achievements.
“When I approved the sale agreement and entered the sale approval order I mistakenly thought that I was merely saving GM, the supply chain, and about a million jobs. It never once occurred to me, and nobody bothered to disclose, that amongst all of the assigned contracts was this lock-up agreement, if indeed it was assigned at all,” Gerber said in July.
Well, what do you know, the Obama Administration didn’t reveal all the details to the judge. Is anyone surprised that this gang of Chicago thugs decided that the judge didn’t need to know the sweetheart deal that would save their union buddies?
It sounds like Judge Gerber is ready to reopen the whole thing, essentially forcing GM into a real bankruptcy, including having to pay back the $27 billion to the Treasury… which, given that they only have about $30 billion on hand, could spell the end of GM.
If we’re lucky, this will come apart very soon… just in time for the non-political-wonks to read the news as they’re deciding whether or not Obama deserves a second term.
I still have no idea after reading this, what the hell happened that wasn’t supposed to happen.
I must be dense.
They’ll get to the Judge. It won’t go anywhere.
Also, not a bad October surprise!!!
Excuse the language, but in the words of Slow Joe Biden, this is a truly Big F...ing Deal!
I suspect they will find some way to avoid this. But, if the judge reopens the bailout, GM will be toast. Maybe the secured bondholders will actually get something in return.
And, they still owe 27 billion to you and I (the taxpayers). The "new GM" stock has fallen 40 percent since IPO, and the federal government can't recoup our investment.
MMM
mmmm
mmmmmm
What’s goes around comes around
GM is going down.
Unfortunately, not likely. Once you trace the various article references back to the WSJ source, the last paragraph of that article states:
ping
And it's equally unlikely that the lamestream RATagandists will report on it inside that same time-frame...if at all.
You have to approve the deal before we will tell you what’s in it.
Too bad writers can't write in terms we laypeeples can understand. However, I assume, they can't follow all the labyrinthian twists and turns, either.
However, I like the "feel" of it, whatever it is, LOL.
Leni
Thanks. Every little bit helps.
I know what you mean- but this part seems to clarify a bit:
http://freebeacon.com/general-motors-is-alive-for-now/
“When I approved the sale agreement and entered the sale approval order I mistakenly thought that I was merely saving GM, the supply chain, and about a million jobs. It never once occurred to me, and nobody bothered to disclose, that amongst all of the assigned contracts was this lock-up agreement, if indeed it was assigned at all,” Gerber said in July.
Industry experts say GM should be very concerned with the judge’s reaction to the deal.
“The judge has made it very clear that he is greatly dissatisfied with the process,” one analyst said. “He’s basically implying that GM hid it from him and that reopening the sale is a possibility.”
On the other hand, my husband is a Delphi Salaried Retiree member. We have been in court for 2 years to get their pension back. Sloooooooooow process.
Last time the bond holders got screwed.
This time it will be the taxpayers, not the UAW that get screwed. Compliments of 0bama
Sure hope not, I enjoy eating, having a home and generally being happy. This needs to be left alone, because if it gets out prior to the election it will NOT help Romney/Ryan.
Well, as a judge he is supposed to ask, under oath, if there is anything he is not being told pertinent to his decisions.
But there will be no undoing. No one will want to cause any economic tremors.
This needs to be left alone, because if it gets out prior to the election it will NOT help Romney/Ryan.
That’s not what this is about.
Maybe, maybe not. If it looks increasingly like Obama is going to lose and drag the Democrats down with him, then he becomes a powerless lame duck. If that happens, more and more people will feel emboldened to stick it to him.
The debate and the latest polls may have shown a tipping point. He's got lots of people pissed off, but afraid to go against the Chicago Machine. If the fear goes away, then he's hosed.
‘zackly.
GM will survive but likely with new owners and not the UAW.
So they can blame Romney if he wns
It would be sweet justice for the salaried people to get their pensions, and the UAW pensions be cut accordingly.
This smells a lot like CYA on the part of the judge.
GM ‘paid’ their creditors 36 cents on the dollar to go away, so their Canadian operations wouldn’t have to go bankrupt.
The bond holders that got screwed in the original ‘bankruptcy’ cried foul! They are now going after the creditors who got paid off to get their money, since in a normal bankruptcy the bond holders come before plain creditors..................
“But there will be no undoing. No one will want to cause any economic tremors.”
Okay but who said anything about what anybody wants?
If there was misappropriation, then it’s a matter of judicious duty to uphold the law one way or the other. If the information was indeed withheld then this case should be formally revisited.
Then what IS this about? Paying back the bond holders? Could this not be done some other way than bankruptcy?
“Could this not be done some other way than bankruptcy?”
It IS what it is.
The whole GM deal was illegal in many ways. First in line creditors are the bond-holders.....they had their investments stolen. Illegal precedent.
Yes, this judge is doing CYA - but he was guilty of an illegal ruling in the first place. Notice the reason he gave for doing it: saving GM and jobs.
The law had nothing to do with his ruling.
Typical liberal.
“Those following the trial, including several people who wouldn’t speak on the record for this article, think it is unlikely Judge Gerber would rule on the matter before the November election.”
I'm not positive, but it looks to me that these are two DIFFERENT articles about the same subject. The Washington Free Beacon article does not reference or credit the WSJ article, that I can find. They both appear to be original articles.
The conclusion at the end of the WSJ article”
“Several people” WOW, credible source.
“wouldn’t speak on the record” WOW REALLY credible
Let's be “Fair & Balanced”
Several people, who have followed this on FreeRepublic, who are WILLING to speak ,on the record (using their screen names), “Think that judge Gerber WOULD rule on the matter before the November election”, thus canceling out your conclusion.
Actually my conclusion is STRONGER than yours, I WIN!
The law had nothing to do with his ruling.
That was my first thought as well when I saw that quote. In a just land, that judge would be impeached.
JudicIAL...yeah that’s the word I should have used...
“Had the courts been really concerned with judicial duty GM would’ve gone through a normal bankruptcy and the taxpayers would not be unwilling partners with the UAW.”
The Obamastration kind of usurped the bankruptcy court’s position and authority to do that as I understand it. And wasn’t GM also compliant with the process? The same went for Chrysler or am I oblivious to some of the (il)legalities involved. I’m not a lawyer or a businessman so I assume there’s a lot more to it.
“The Washington Free Beacon reports:
As GM teetered on the edge of bankruptcy in June 2009, it cut a $367 million “lock-up agreement” with several major creditors in order to prevent its Canadian subsidiary from going under. The move spared the subsidiary from fulfilling the $1 billion debt it owed the creditors—major hedge funds—ensuring that GM would not have to face bankruptcy courts in two nations, which could have delayed the company’s recovery.
The trustee for (old GM) creditors shortchanged by the government-driven bankruptcy are now suing the hedge funds in a move that could undo the bailout.
“Many U.S. creditors waived their rights to object because the government wanted to push through the bailout for political reasons,” risk analyst Chris Whalen said. “If they had continued through normal channels, they could have easily been in bankruptcy for five years. So they made sure these issues were not adequately briefed before the court.”
The GM that exited bankruptcy was radically different than the one that entered. The Treasury Department arranged for the company to split into Motors Liquidation Co., known as “old GM,” and created a “new GM” with the help of $30 billion from American taxpayers. Judge Robert Gerber, who approved the sale with little hesitation, could now reverse the entire auto bailout—and overturn one of President Barack Obama’s signature achievements.
“When I approved the sale agreement and entered the sale approval order I mistakenly thought that I was merely saving GM, the supply chain, and about a million jobs. It never once occurred to me, and nobody bothered to disclose, that amongst all of the assigned contracts was this lock-up agreement, if indeed it was assigned at all,” Gerber said in July.”
The “lock-up” agreements are secret but binding agreements that the creditors entered into that they, apparently would not press too hard for payment, made to keep Canada GM out of bankruptcy. Now the creditors not part of the secret deals feel they were burned and want some money from the creditors, hedge funds, that had these secret deals and the judge says, If only I had known.
Well, Judge, that's why you're a judge and have a staff.
In short..How come you get a better deal than me?
Judge Greber is not a judge, but a populist politician in black robes. His job isn’t to “save” GM or jobs, but to adjudicate a bankruptcy to the benefit of creditors.
More judicial tyranny does not a republic make. Now he’s embarrassed at his lack of judicial ethics and basic economics. We’re a capitalist society and if you don’t pay the capitalists they’ll depart.
Of course, GM’s union employees will be unemployed just in time for Romney’s term to begin. So Judge Greber makes my point doubly.
So many people got screwed it would be a big job to list them all.
Don't forget the many profitable dealerships Obama ordered closed and the jobs he killed.
Over 2,000 GM and Chrysler dealerships were closed putting 1000,000 people out of work, and destroying the equity value of these small businesses. If anyone wants proof of his disdain for small business owners just read the history of this "Grand Theft Auto".
The entire auto crisis was manipulated by Obama to steal property from the rightful owners, investors and creditors and hand it over to the UAW.
It would be interesting to see how many of the people Obama bankrupted, stole pensions from, and put out of work will still vote for him this time around.
And the cruel irony is, that GM and the country would be better off today if GM had just gone through the normal bankruptcy procedure. But that would not have rewarded the labor unions for the support they gave Obama in 2008.
Aren’t there companies that will give you the current cash value of your Delphi pension in exchange for the future payments and a life insurance policy?
The link to the WSJ article is not obvious in the Free Beacon article, but it’s there.
Look for the phrase: “Gerber said in July”. That’s a link to the WSJ article.
I understood the article to the extent that it just raises further questions like how much of a choice did GM really have when bailout “options” were presented.
The only economic tremor would be to the UAW. The union contract would be tossed, the secures creditors would go to the front pd the line where they belong, and there will be a proper BKO proceeding. All those dealers who were screwed over I’m favor of politically connected parties would get their franchises back; which will less to a great deal of hiring.
Custer should be so lucky regarding one of his "signature achievements."
“Custer...”
Hah!...he was “Pure Michigan” too.
His post on what took place:
Contract law was trampled as claims that were supposed to be equal received unequal treatment. GM and Team Obama chose a debtor-friendly venue of NY by starting an action against itself when GM-owned Saturn of Harlem initiated a claim against GM in that court.
Debtor-friendly Judge Gerber ruled against bondholder group that sought due process and a negotiated settlement. Treasury Department, through Auto Task Force member Harry Wilson threatened full liquidation of GM if the court did not agree to Task Force/Obama’s plan. The plan was enacted as sought and bondholders received a fraction of what the UAW got. Approximately 10 to 15 cents on the dollar compared to a typical negotiated bankruptcy which would have seen them get 40 to 50 cents on the dollar.
5 posted on Thursday, October 04, 2012 3:01:59 PM by Mark Modica
Bump
Wrong Machine. He doesn’t belong to the Daley’s or Madigan.
This time it will be the taxpayers, not the UAW that get screwed. Compliments of 0bama Depends on timing. Can't win this case too quickly. Need to stall past Jan 20. Even past Jan 1st (new congress) would remove some chances for mischief. Of course both presume we win the elections. We lose all otherwise.
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