American Elephants

I Knew I Didn’t Understand Bankruptcy Law, But It’s Even Worse Than I Thought. by The Elephant's Child
May 22, 2009, 8:29 pm
Filed under: Capitalism, Economy, Law, Politics | Tags: , ,

The Obama administration is going to send General Motors into bankruptcy as soon as the end of next week, “under a plan that would give the automaker tens of billions of dollars more in public financing as the billions of dollars more in public financing as the company seeks to shrink and reemerge as a global competitor, sources familiar with the discussions said” according to The Washington Post.

According to the draft bankruptcy plan the company will get around $30 billion in additional federal loans. The federal government will get  50 percent of the restructured company, take the right to name members of the board, and the United Auto Workers retiree health fund will own as much as 39 percent of the restructured company in exchange for giving up its claim to at least $ 10 billion that the company owes.  Investors who own $27 billion worth of GM bonds — their senior legal and contractual debt — are supposed to settle for 10 percent of the restructured company.

Yes.  The UAW is owed $10 billion, gets 39 percent of the company.  Bondholders, who are supposed to be paid first and are owed $27 billion get only 10 percent, I have to assume, because the unions had a big part in putting Obama in office.  Apparently Obama skipped Contract Law when he was in law school.

There’s more, much more.  Do read the whole article, maybe you will understand more than I do.  The only thing I’m sure of is that the taxpayers are getting the shaft.

Check out this priceless little pamphlet, and take note on the bottom of the title page just who published it.

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