Creditors Pushed To Surrender Claims Of Billions
At a meeting with executives from four of the nation's largest banks earlier this month, the chief of the government's auto task force, Steven Rattner, delivered a message that shocked some in the room.
To save Chrysler, he told them, the four banks and several other financial firms would have to surrender their claims to most of the $7 billion the automaker owed them. And what would the banks get in return for this sacrifice? Nothing.
"People's jaws just dropped," said a person familiar with the discussions.
The banks -- J.P. Morgan Chase, Citigroup, Morgan Stanley and Goldman Sachs -- have all since balked at the government's proposal. This week, they are drafting a counteroffer.
But those four banks are themselves recipients of billions of dollars in government largesse. Collectively, they have received $90 billion from the rescue program for the country's banks. Now, their critics say, the firms have an obligation to cooperate as the government seeks to save Chrysler.
LinkAnother reason why the 0Bama is refusing to let the banks pay back TARP funds. He needs that to further his control of the car makers, and to keep the UAW on the plantation. Let the car companies go the full bankruptcy course, not this surgical bull
designed to protect the UAW.
