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Text size [+][-]  Saturday November 21 2009GLOBAL EDITION

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30 Apr 2009 18:01

Bailout America



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Context News

President Obama said Chrysler failed to reach an agreement with all of its secured creditors, forcing the carmaker into a Chapter 11 bankruptcy filing.

Obama said Chrysler had come to terms with Fiat for a broad partnership that could allow the Italian automaker to take majority control of Chrysler.

The president said creditors led by JPMorgan had agreed to exchange their secured loans in return for cash equating to about 30 cents on the dollar. But a handful of hedge funds and “speculators” refused to accept those terms.

“I don’t stand with them,” Obama said, referring to the holdout creditors.



 

 



RELATED STORIES

It’s politically expedient to blame recalcitrant hedge funds for forcing the carmaker into bankruptcy by not accepting 33 cents on the buck. But treading on their rights as secured creditors is bad for capitalism and may hamper Obama’s exit strategy from Bailout America.

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More stories by:  Rob Cox




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