Lets talk about precedents...

[Dionysos]

Originally Posted by St. Stalin the Apathetic

haha - just saying there's a process to these things

I still have no clue what the specific facts are that have him pissed... I think the charge is that the secured creditors were fucked and the unsecured creditors weren't... but no clue specifically how/what/when etc.

He hates Obama and is screeching about anything related to the economy. He also thinks the sky is going to fall later this year when the commercial lending goes apeshit, which is a distinct possibility.

[PETA]

Originally Posted by Dionysos

He hates Obama and is screeching about anything related to the economy. He also thinks the sky is going to fall later this year when the commercial lending goes apeshit, which is a distinct possibility.

He does have this awful tendency to be right.

As it was explained to me... after the new rules following '86 and the S&L crisis there was a huge amount of refi going on. Many had relatively modest principle payments with big balloons.... which were lumped because many refied at the same time. Meaning there's a shit ton of balloons coming due that the borrowers cannot pay and refinancing is not looking like a available option for many. Not a matter of if it crashes... just when

[Dionysos]

Originally Posted by St. Stalin the Apathetic

He does have this awful tendency to be right.

As it was explained to me... after the new rules following '86 and the S&L crisis there was a huge amount of refi going on. Many had relatively modest principle payments with big balloons.... which were lumped because many refied at the same time. Meaning there's a shit ton of balloons coming due that the borrowers cannot pay and refinancing is not looking like a available option for many. Not a matter of if it crashes... just when

That's a high-level view, yea, though I think the degree to which it crashes is what's up for speculation. I agree with him that there's going to be a hit on the commercial market, we just disagree on the extent. A lot of the air has already been let out of the commercial market already imo.

[PETA]

Originally Posted by Dionysos

That's a high-level view, yea, though I think the degree to which it crashes is what's up for speculation. I agree with him that there's going to be a hit on the commercial market, we just disagree on the extent. A lot of the air has already been let out of the commercial market already imo.

my bankruptcy counsel advised that we may be lucky and have the hurt fall more in line with (what I presume to be) your "lesser" crash but suspects we won't be so lucky... though I've known her to be wrong

[Dionysos]

Originally Posted by St. Stalin the Apathetic

my bankruptcy counsel advised that we may be lucky and have the hurt fall more in line with (what I presume to be) your "lesser" crash but suspects we won't be so lucky... though I've known her to be wrong

It wouldn't surprise me, but from what I had been reading/hearing I would have expected to see some of the effect of the commercial sector by this point in the year. Either it's not happening to the dire levels predicted or it's been delayed(for a number of potential reasons).

[PETA]

yup... could be

[david austin]

Originally Posted by St. Stalin the Apathetic

My point was that there is no priority amongst unsecured creditors. If they receive anything in a bankruptcy its often a result of wheeling and dealing.

Senior and junior contracts? When you say contract do you mean loan or other contract?

The secured lenders had a case until many of them backed out... and it wasnt exactly known why although the Indiana state treasurer did an interview yesterday that he has had numerous threats from the administration to drop their case.

Bottom line is secured lenders were offered .30 on the dollar and the unsecured lenders were offered .50.

In my opinion there is absolutely no coincidence that these unsecured lenders were the union... who also get a decent percentage in the 'newchrysler'

So yeah... thats my beef. See this contract... oh yeah... that doesn't mean anything anymore. Does it have a legal stance to actually block the sale? No. Should it? Absolutely. In essence these secured lenders were offered ZERO opportunity to argue their case. The only possible recourse they had was to argue that the entire bk proceeding was unlawful because of misuse of TARP funds.

Now... this is where the courts naturally throw up their hands and say 'i dunno'. And the Obama admin instead of coming back to the table and dealing with the issue of what a contract actually means... pretty much slapped the pension funds in the face with the tact of 'yeah... you dont really have a case do you?'

Why would they not come back? Because Fiat has said all along that they would back out by monday the 15th if the deal was not done. Team Obama cant have that.

I'm not at all familiar with the facts so I'm just relating general bankruptcy info here. Bankruptcy is a court of equity not a court of law. Equity = that thing which left undone shoud be done... translation = the court tries to work out what it thinks to be the fairest deal given constraints it must apply.

Correct. The arguement is that this bk isnt a court of equity... its a court of politcal strongarming to push a bk through the system while throwing the sanctity of every contract out the window. All this for what appears to be a favor of 'union wants... union gets'

Ah, I think of the word "precedent" as a term of art. You were using it in a more general sense. And yes, many of Obama's moves appear to have destabilized the sanctity of contract and it has forced a lot of smart money out of the market that might otherwise be looking at these troubled companies.

Yes I am using it in a general sense to argue how this bk will greatly affect every new 'troubled' and 'too big to fail' case for decades.

Why on earth would a lender give its cash to ANY company when they know flat out that the govt will rip up that contract in favor a potentially politically motivated group... and yes... that means continued mass uncertainty in the markets.

What lenders would possibly want to extend hands to 'newGM' under this scenario?

[david austin]

Originally Posted by Dionysos

It wouldn't surprise me, but from what I had been reading/hearing I would have expected to see some of the effect of the commercial sector by this point in the year. Either it's not happening to the dire levels predicted or it's been delayed(for a number of potential reasons).

I talked about this in another thread.

Most reits have simply done offerings to pay debt revolves due this quarter.

The real effects wont be seen for a few more quarters... and that will last through 2013 when baring a complete turnaround to spring 2007 levels debt of monumental proportions will be due.

[Dionysos]

Originally Posted by david austin

I talked about this in another thread.

Most reits have simply done offerings to pay debt revolves due this quarter.

The real effects wont be seen for a few more quarters... and that will last through 2013 when baring a complete turnaround to spring 2007 levels debt of monumental proportions will be due.

I've seen some that have secured new financing though(none of which are ARMs btw), like First Industrial.

[PETA]

Originally Posted by david austin

The secured lenders had a case until many of them backed out... and it wasnt exactly known why although the Indiana state treasurer did an interview yesterday that he has had numerous threats from the administration to drop their case.

Bottom line is secured lenders were offered .30 on the dollar and the unsecured lenders were offered .50.

In my opinion there is absolutely no coincidence that these unsecured lenders were the union... who also get a decent percentage in the 'newchrysler'

leaving the politics aside....

the secured creditors can claim up to the value of their collateral. They can claim deficiency but I believe that's an unsecured claim - meaning they get two bites at the apple. Further, the value of their collateral may have been crap. Just speculating here David. I don't doubt there's some good old fashioned Chicago politics going on.

Originally Posted by david austin

So yeah... thats my beef. See this contract... oh yeah... that doesn't mean anything anymore. Does it have a legal stance to actually block the sale? No. Should it? Absolutely. In essence these secured lenders were offered ZERO opportunity to argue their case. The only possible recourse they had was to argue that the entire bk proceeding was unlawful because of misuse of TARP funds.

Bankruptcies by their very nature deal with breached contracts

Originally Posted by david austin

Now... this is where the courts naturally throw up their hands and say 'i dunno'. And the Obama admin instead of coming back to the table and dealing with the issue of what a contract actually means... pretty much slapped the pension funds in the face with the tact of 'yeah... you dont really have a case do you?'

I forget the case... Chicago case... United. The bankrupt entity can take funds from pension plans to pay creditors. Not sure if that's what happened here or not.

Originally Posted by david austin

Why would they not come back? Because Fiat has said all along that they would back out by monday the 15th if the deal was not done. Team Obama cant have that.

Thought I read today that they said they wouldn't back out?

Originally Posted by david austin

Correct. The arguement is that this bk isnt a court of equity... its a court of politcal strongarming to push a bk through the system while throwing the sanctity of every contract out the window. All this for what appears to be a favor of 'union wants... union gets'

the biggest gorilla generally gets his way whether a private entity or the gov't... that's just the way of the world

Originally Posted by david austin

Yes I am using it in a general sense to argue how this bk will greatly affect every new 'troubled' and 'too big to fail' case for decades.

depends... we haven't been in this shape since '82. It is not likely to happen again for a few more decades. Who knows how the gov't will handle things then or what they'll do between now and then to address concerns like yours.

Originally Posted by david austin

Why on earth would a lender give its cash to ANY company when they know flat out that the govt will rip up that contract in favor a potentially politically motivated group... and yes... that means continued mass uncertainty in the markets.

What lenders would possibly want to extend hands to 'newGM' under this scenario?

Doesn't Obama own a few banks now?

[david austin]

It should come as no surprise that there is now word of taped convos shedding light on the (accused) threats dished out by the admin to the holdout funds who were at the time completely unwilling to accept a backseat to the union.

Makes Rattners exit all that more timely.

Another admin black eye coming?

[Dionysos]

Originally Posted by david austin

It should come as no surprise that there is now word of taped convos shedding light on the (accused) threats dished out by the admin to the holdout funds who were at the time completely unwilling to accept a backseat to the union.

Makes Rattners exit all that more timely.

Another admin black eye coming?

Why's it gotta be black?!?!

[PETA]

no shit.. it should be a multicultural and ethnically diverse eye muther fucker!!