Wednesday, May 06, 2009

White House puts UAW ahead of property rights by Michael Barone

Michale Barone one of the best political reporters in the United States has a column today about how the Obama White House strong armed some bond holder who held bonds for Chrysler into subordinating their secured debt to the United Auto Workers unsecured claims as Chrysler went into Bankruptcy. Secured debts have priority over unsecured debts in Bankruptcy.

.....bankruptcy lawyer Tom Lauria said on a WJR talk show that morning. “One of my clients,” Lauria told host Frank Beckmann, “was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight.”......

The Chrysler negotiations will not be the last occasion for this administration to engage in bailout favoritism and crony capitalism. There’s a May 31 deadline to come up with a settlement for General Motors. And there will be others. In the meantime, who is going to buy bonds from unionized companies if the government is going to take their money away and give it to the union? We have just seen an episode of Gangster Government. It is likely to be part of a continuing series.