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Posts Tagged ‘Tom Lauria says White House threatens clients’

Chrysler’s Non-TARP Lenders and Uncle Sam: Mano a Mano

Posted by Larry Doyle on May 4th, 2009 1:25 PM |

The Chrysler bankruptcy drama escalates. Bloomberg reports, Chrysler Non-TARP Lenders Object To Auction Plan.   

Uncle Sam would seemingly like to fast track the delivery of Chrysler into Fiat’s hands and run roughshod over the standard rules and regulations of bankruptcy proceedings. Will Judge Henry Gonzalez allow this to happen?

The lenders maintain:

. . . the U.S. government is violating federal law in order to preserve the automaker.

The group, calling itself Chrysler’s non-TARP lenders, in reference to the Troubled Assets Relief Program, seeks to block the proposed sale to an alliance led by Fiat SpA, as well as a request by the U.S. automaker for approval of a $4.5 billion Treasury loan to finance the reorganization. The group said secured lenders who agreed to the Fiat deal, such as JPMorgan Chase & Co., Citigroup Inc. and Goldman Sachs Group Inc., were conflicted because they had also accepted TARP funds.

The process is “tainted” because it was dominated by the government, the lenders argued in papers filed today in U.S. Bankruptcy Court in Manhattan. The group also said the short period of time given to evaluate the sale was improper and the hearing on bid procedures that began today should be delayed. The judge delayed the hearing until 2:30 p.m. tomorrow, ordering the members of the lender group to reveal their identities. (more…)

Is Barack Obama Going Tony Soprano? UPDATE>>

Posted by Larry Doyle on May 2nd, 2009 11:07 AM |

“One of my clients was directly threatened by the White House.”

That’s a quote, folks, from a lawyer representing firms which lent Chrysler money on behalf of their clients, including pension funds, teachers, labor unions, college endowments, et al.

Threatening creditors may be common practice in the underworld. In the world of business and politics, commonly accepted rules of law, business practices and ethics are widely accepted and adjudicated by the courts to prevent abuse. Did the White House just abuse the Constitution in the process of engaging Chrysler’s non-TARP creditors? Tom Lauria, an attorney with White & Case representing a few non-TARP Chrysler creditors, believes the White House did exactly that.

The 10 minute interview (link provided at end of story) that Lauria gave yesterday morning to Detroit radio station WJR’s Frank Beckmann is a MUST LISTEN. (UPDATE: We now have a YouTube audio of the Frank Beckmann-Tom Lauria radio interview. THANK YOU Paul V!!)

Lauria offers, “I represent one less investor today than I represented yesterday. One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House press corps would destroy its reputation.”  

Wow!!! Is the press corps so in bed with the White House that it will do its dirty work? Will other creditors fall in line under the pressure of this threat? Is Lauria’s analysis credible?

I believe the answer to all of these questions is yes!!    

In my April 2009 Market Review: Brave New World I wrote:

Companies, consumers, and investors will be forced to adapt to a regular presence of Uncle Sam. He is not a good business partner.

Our economic landscape just entered a whole new realm. I strongly recommend that you listen to the audio recording of Frank Beckmann’s interview with Tom Lauria (special thanks to Daisyjane for the link). 

UPDATE: Here’s the YouTube audio so you don’t have to leave this site. Thank you, again, to Paul.

 

LD

See also: “White House uses strong arm tactics to extort concessions from lenders,” via Memeorandum.com.






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