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Chrysler slams Indiana State Treasurer's demands

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posted on May, 25 2009 @ 10:02 PM

Chrysler slams Indiana State Treasurer's demands

Chrysler slammed Indiana State Treasurer as making demands that would ultimately push the carmaker into liquidation.

[The Treasurer, who represents retirees secured interests for loans made to Chrysler], and oversees pension funds invested in Chrysler debt, has objected to Chrysler LLC's plan to quickly sell itself in bankruptcy, claiming it is a dangerous path (in violation of bankruptcy law), that would hurt pensions for thousands of his state's retirees.

(visit the link for the full news article)

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posted on May, 25 2009 @ 10:02 PM
About Those 'Speculators' . . . Pension funds also get whacked by Uncle Sam.

Remember how President Obama blamed Chrysler's bankruptcy filing last month on "a small group of speculators" who turned down Treasury's $2 billion final offer for their $6.9 billion in debt? Well, it turns out that retirees and pensioners held a large portion of those"guaranteed" investments! and will get a raw deal from Uncle Sam.

Indiana Treasurer Richard Mourdock revealed this week that his state's police and teacher pension funds have lost millions of dollars in the Chrysler "restructuring." Indiana's State Police Fund and Major Moves Construction Fund, which finances roads and bridges, together lost more than $1 million. And the Teacher's Retirement Fund "suffered, at a minimum, a loss of $4.6 million due to the action of the Obama government," reports Mr. Mourdock.

Far from being speculators, these funds represent retired public employees, including cops and teachers. The funds paid a premium to buy "secured" status, only to discover that they were politically outranked by the United Auto Workers in the White House hierarchy.

The Obama administration's auto task force is asking Federal courts to ignore Constitutional protection of contract rights and uniform Bankruptcy law to eliminate GM and Chrysler's secured bond debt.

Chrysler and the US Treasury offered secured creditors just under 30 cents on the dollar to settle claims totaling $6.9bn. Four big banks, after accepting TARP funds and conditions, accepted the offer following political pressure from Washington.

However, the Indiana State Teachers’ Retirement Fund said on Wednesday that it had a fiduciary responsibility to its members to continue the fight. The fund stands to lose $4.6m under the current settlement proposal and has teamed up with Richard Mourdock, Indiana state treasurer, to try to recover those losses.

The latest objections could galvanize other lenders to renew their challenge. “I fully support their motion and believe a number of lenders (including us) will ultimately join their group,” said George Schultze of Schultze Asset Management, one of the creditors that had abandoned an earlier legal fight.

In a court filing on Wednesday, the Indiana funds accused the government of adopting a strategy of “the ends justify the means”. They also said the Treasury “has taken constructive possession of Chrysler and is requiring it to adopt a sale plan in bankruptcy that violates the most fundamental principles of creditor rights – that first-tier secured creditors have absolute priority”.

GM faces a series of interim deadlines through this week. That includes a decision expected this week by the German government on the preferred bidder for GM's Opel unit.

GM will also learn on Wednesday how much of its $27 billion in bond debt was tendered in exchange for shares. GM has set a target of slashing 90 percent of its bond debt, a goal analysts see as unreachable.

Moreover, Obama is forcing 789 Chrysler dealers into bankruptcy themselves, even with ongoing, successful businesses! Many dealers have undertaken expansions, mortgaged their property, and even expanded operations to accomodate Chrysler prior to the forced reorganization.

Rocco Massarelli is down but not out.

"I'm too stubborn to quit and I'm too stupid to go away," said the owner of Richard Chrysler-Jeep-Dodge in the western Chicago suburb of St Charles. "I'm going to keep selling cars and fight this to the end."

Massarelli's dealership is one of 789, out of a total of 3,181 Chrysler dealerships, with which the bankrupt automaker has said it plans to eliminate franchise agreements as of June 9.
Massarelli said he was shocked Chrysler was ditching his franchise, a business his father founded 30 years ago.

"We don't fit the guidelines for closure," Massarelli said. "We're profitable, we've never missed a payment and we've done everything Chrysler has ever asked us to help them out."

Since 2006, he said he has taken more cars whenever Chrysler asked and at one point had 400 new cars on his lot worth $12 million. He bought the local Dodge franchise three years ago for $1.7 million on Chrysler's request.

"Every time Chrysler said they needed us, we were there for them," Massarelli said. "Now they won't even return my calls."

He said Chrysler Financial told him he may sell his inventory to other dealers at a loss of around $3,000 per vehicle. If he loses the franchise, he will have to sell his inventory as used cars, at a loss of around $10,000 per car.

But Massarelli said that is the least of his worries. His 20 remaining staff will be jobless and he has a $4 million mortgage on the dealership.

"That mortgage will be foreclosed on and I could lose my home," he said. "I'll be lucky to walk away with the clothes on my back.

"I'm not asking for a handout, I just want to keep running a business we've managed successfully for decades," he added.

This isn't political grandstanding. Auto dealerships and public investment officials like Mr. Mourdock have a fiduciary duty to seek maximum returns for investors and retirees.

The question for all public officials responsible for investing pension money is whether they too should conclude that investing in U.S.-aided companies now carries so much political risk that it violates their legal obligations.

Such are the wages of White House disdain for legal contracts.

(visit the link for the full news article)

posted on May, 25 2009 @ 10:08 PM
It's all about making a fast buck.

All about greed. People dont matter, they will just walk all over them in their 500$ shoes. That's per foot.

posted on May, 26 2009 @ 10:16 PM
reply to post by Tentickles
It's so shallow and perverse of Obama to characterize retired teachers and civil servants as "speculators" who are coldly driving these cos. into liquidation.

He'll stoop to any level to work his agenda at anyone's expencse.

posted on May, 27 2009 @ 03:29 AM
reply to post by jdub297

its not the teachers - its the greedy asshats trying to make themselves big bonuses in this situation - same as the UK when the iceland banks went bust and alot of councils had money with them

posted on May, 27 2009 @ 09:04 AM
reply to post by Harlequin

Some people know that the retirees' pension plans are not the object of the attacks; but, they are the only ones pressing forward trying to preserve their Constitutionally guaranteed property from being taken by Barack Obama and his UAW supporters.

Since Obama saw fit to characterize these legitimate claims and their legal arguments as "greedy" and "speculating", he's jyingly lumped them into the same pot as the "greedy asshats" who've unjustly enriched themselves.

Ask yourself: If your only income was going to be slashed by Obama, if it was guaranteed by the US Constitution and Bkcy laws, and if you were essentially being called a thief for asking a judge to uphold your legal rights, would you be pissed?

Would you just walk away, and hope Obama's "stimulus" and budget included some kind of welfare to keep the lights on and food on the table?

If your retirement income was instead going to be diverted to Obama's union supporters and to the big banks who decided to 'go along', wouldn't you want to defend yourself?

Bottom line:

Obama has stolen from these people, and then called them thieves for calling the cops!

deny ignorance


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