Chrysler secured creditor to fight "illegal" plan

[thundley4]

NEW YORK (Reuters) - Plans for a quick sale of Chrysler to a new company majority-owned by a union-aligned trust is "patently illegal" and will be fought in bankruptcy court, one of the holders of the automaker's secured debt said on Thursday.

"We don't succumb to pressure and don't agree to unfair and illegal payment schemes," said George J. Schultze, the managing member of Schultze Asset Management. "We're not conflicted by TARP money or active stress tests."

Three funds associated with the asset manager hold the automaker's secured debt and are part of the nine-member Chrysler Non-TARP Lenders group fighting the restructuring proposal. TARP is the U.S. Treasury's $700 billion Troubled Asset Relief Program.
Four large banks that hold most of Chrysler's $6.9 billion secured debt have agreed to accept about 29 cents on the dollar as part of a government-brokered reorganization plan.

Schultze said the banks only agreed to the plan because they had accepted billions of dollars in government capital.

Reuters

It would be nice to see some sort of brake put on the socialization of US corporations, but I doubt it will happen in this case.

[RightCoast]

"We don't succumb to pressure and don't agree to unfair and illegal payment schemes," said George J. Schultze, the managing member of Schultze Asset Management. "We're not conflicted by TARP money or active stress tests."

Mr Schultze, welcome to Siberia, your shovel is over there. Please start digging barack's northern tribute to the Panama Canal.