More confirmation Car Czar Threatened Chrysler Bondholders

There have been several reports of Chrysler bondholders being threatened by the Obama administration. Here is another report. I don't know what to make of this, but here it is.
Econo-blogger Finem Respice:

Today, I have the distinctly unpleasant distinction of being on the receiving end of exactly this sort of recollection. That is, a bit of dialogue so genuinely awful that- were it not from a source I consider impeccable, and unimpeachable- I would not dare to credit at all. Unfortunately, I must do precisely this, and personally believe it to be totally, frightfully accurate...

...I take no pleasure in relaying it, instead hoping that someone more directly in the business of running such matters down and printing them will carefully document it and- if true- expose it, or- if not- discredit it quickly and finally. This (as yet unproven) yarn goes exactly like this:

Confronting the head of a non-TARP fund holding Chrysler debt and unwilling to release it for any sum less than that to which it was legally entitled without compelling cause, this country's "Car Czar" berated the manager of said fund with an outburst of prose substantially resembling this:

Who the f*** do you think you're dealing with?

We'll have the IRS audit your fund.

Every one of your employees. Your investors.

Then we will have the Securities and Exchange Commission rip through your books looking for anything and everything and nothing we find to destroy you with.

It is a tale literally so outlandish and difficult to picture that, in these circumstances and given the source, it rings absolutely true. Consider all this in a larger context where... You see Non-TARP entities claiming that:

...we have been systematically precluded from engaging in direct discussions or negotiations with the government; instead, we have been forced to communicate through an obviously conflicted intermediary: a group of banks that have received billions of TARP funds.

...not to mention the fact that the salary, bonus and "stress test" results for TARP banks are all within Treasury's control...

More Chrysler Creditors Claim They Were Threatened By The Obama Team

The Business Insider reported:

Creditors to Chrysler describe negotiations with the company and the Obama administration as "a farce," saying the administration was bent on forcing their hands using hardball tactics and threats.

Conversations with administration officials left them expecting that they would be politically targeted, two participants in the negotiations said.

Although the focus has so been on allegations that the White House threatened Perella Weinberg, sources familiar with the matter say that other firms felt they were threatened as well. None of the sources would agree to speak except on the condition of anonymity, citing fear of political repercussions.

The sources, who represent creditors to Chrysler, say they were taken aback by the hardball tactics that the Obama administration employed to cajole them into acquiescing to plans to restructure Chrysler. One person described the administration as the most shocking "end justifies the means" group they have ever encountered. Another characterized Obama was "the most dangerous smooth talker on the planet- and I knew Kissinger." Both were voters for Obama in the last election.

Neil Cavuto interviewed attorney Tom Lauria on the issue, but he is clamming up now.

A morally corrupt President panders to the UAW at the expense of everyone else

When pandering to his UAW union base, President Obama has revealed the morally corrupt level to which he is willing to stoop. According to Freep.com, the Obama administration is pressing secured creditors of GM to take a ten percent stake in the new company in exchange for $43 billion in secured bond debt. The UAW is being offered a 39% stake in the the new company for $10 billion of the $20 billion owed to the health care fund. The Government is planning on taking a 50% stake for forgiving $10 billion in TARP loans. Stockholders will get the other 1%. Where is the fairness in this deal? Why should the UAW and the Government get four or five times the stock in exchange for forgiving one fourth the debt of the bondholders? This is clearly a case of throwing the financial institutions, that risked their stockholders hard earned money, under the bus to prop up the extravagant benefit package of union members who enjoyed bloated wage and benefit packages for their entire careers. Normally, secured debt holders would own over 90% of a company after bankruptcy. Taxpayers were promised the TARP loans would be called and they would go to the front of the line to recover these loans in case of bankruptcy. Now, taxpayers are being asked to donate $10 billion in a wealth transfer to the UAW. Also, there will be severe repercussions in the credit markets. Who will loan money to America's large unionized companies if a judge allows this deal to stand? Lenders will realize they go to the back of the line with stockholders if there is a bankruptcy. They will not be willing to loan money to any large unionized company unless they have a stellar credit rating. Consequently, cash flow will become tighter and more companies may be forced into insolvency unless the Government intervenes with taxpayer money. President Obama is morally corrupt to propose a deal of this nature. Where is the fairness in asking people who pay for their own health care and must fund their own retirements to bailout someone who received bloated and extravagant wages and benefits their entire lives? Not only is this proposal unfair to bondholders and taxpayers, this deal would be unfair to Ford. Having to negotiate a contract with someone that owns 40% of one of their biggest competitors puts Ford at a severe competitive disadvantage.