jps wrote:
On Sat, 9 May 2009 19:10:52 -0400, "Eisboch"
wrote:

"jps" wrote in message
...

On Sat, 9 May 2009 18:19:51 -0400, "Eisboch"
wrote:

Is what's happening illegal?

If, indeed, the bond holders (who are secured creditors) were prevented
from negotiating or their proposal ignored, as their lawyer claims, a law
was broken. In a bankruptcy proceeding *all* creditors who want to be
heard, must be heard.


Who has priority and in what order from a legal standpoint?

Secured creditors are first in line. Unsecured creditors (vendors, etc) and
stockholders are last.


In order to receive the percentages you state, there must be some
value. What is being given in return?
That's just it. Virtually nothing. No consideration. Well, in a way there
is. The unions are getting
55% ownership for making previous concessions, I suppose. Fiat, to the
best of my knowledge isn't putting up a nickle. I've tried to find out
what, if anything Fiat is "paying" for their 20% stake. I can't find it. I
did find a reference that stated that they aren't putting any money up for
the stock. They are just assuming the operational and marketing roles. The
Fed owns the rest.

At one point Obama said that Fiat's position would increase if the
taxpayer's bailout money is repaid, but then he changed his tune and quietly
let it be known that the $8B that the Fed has given Chrysler so far
"probably won't be repaid".

I honestly don't know about these proceedings so I'm curious.

Bankruptcy proceedings are well established and are supposed to give fair
consideration to all parties.
This one was railroaded. It's why Obama wanted to avoid it to begin with.

Personally, as a former businessman, I felt that lacking a white knight
buyer or investor, the fairest way for all concerned parties for both
Chrysler and GM to restructure was via the Chapter 11 bankruptcy route.
It's designed to be fair. This time it wasn't.

Eisboch

Are the union concessions considered owed payroll or wages? Under BK
law, anything that's owed to the employees comes before everything,
including secured debt.

Chapter 11 and Chapter 7 are VERY different.

May have been part of their agreement in making the concessions.

Is Fiat putting any money in? Guarantees to assume debt?