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The Money Times – While the group of Indiana pension funds, holding $42 million debt in Chrysler, opposed the treatment meted out to them in the form of reorganization process with Fiat, the court denied hearing to the pension funds and upheld the decision of Chrysler- Fiat alliance.
While refusing the hearing to the pension funds, the Supreme Court issued a statement saying that the aggrieved parties must convince four out of nine judges that the matter is serious to warrants full appeal.
Indiana Treasurer Richard Mourdock, who led the cause of the pension funds, said that he was disappointed. “The United States government has, I continue to believe, acted egregiously by taking away the traditional rights held by secured creditors.”
Washington Post – The government-orchestrated sale of Chrysler to Italian carmaker Fiat is facing a fresh legal challenge from some of the American carmaker’s lenders, which are trying to take the fight to federal district court.
Pension funds representing Indiana teachers and police officers, and a state construction fund, filed Wednesday to have the Chrysler bankruptcy proceedings heard by the district court, which has authority over the bankruptcy court.
The funds contend that the automaker’s sale violates their rights as senior secured lenders to Chrysler, and that under the proposed sale, they would recover less than junior lenders. They also think the government does not have the authority to use federal rescue money designated for banks to bail out Chrysler.
The Business Insider – It looks like the "surgical" 30-60 day bankruptcy may be a go.
Late last night, after a marathon session in court, Judge Arthur Gonzalez basically approved the plan to merge Chrysler into Fiat, rejecting the claims from the senior secured (though minority) bondholders.
Philadelphia Bulletin – Chrysler LLC dissident lenders must reveal their identities by 10 a.m. today, a bankruptcy judge ruled, rejecting claims that their safety was at risk.
U.S. Bankruptcy Judge Arthur Gonzalez in New York forced the group to file a list of its members publicly, denying their request to reveal their identities only to the bankruptcy court. Judge Gonzalez said the lenders have no evidence that keeping their identities private would help protect them. The group seeks to block an auction of most company assets to an entity managed by Fiat SpA, an outcome Chrysler said would force it to liquidate, costing thousands of jobs.
President Obama’s harsh attack on hedge funds he blamed for forcing Chrysler into bankruptcy yesterday sparked cries of protest from the secretive financial firms that hold about $1 billion of the automaker’s debt.
Hedge funds and investment managers were irate at Obama’s description of them as "speculators" who were "refusing to sacrifice like everyone else" and who wanted "to hold out for the prospect of an unjustified taxpayer-funded bailout."
"Some of the characterizations that were used today to refer to us as speculators or to say we’re looking for a bailout is really unfair," said one executive who spoke on condition of anonymity because of the sensitivity of the matter. "What we’re looking for is a reasonable payout on the value of the debt . . . more in line with what unions and Fiat were getting."
Daily Times – Banks and hedge funds that hold $6.9 billion in Chrysler LLC debt have proposed forgiving $2.5 billion of it in exchange for about a 40 percent stake a Chrysler-Fiat alliance, according to two people briefed on the proposal.
One of the people said the lenders delivered their counterproposal to Chrysler and the U.S. Treasury Department late Monday night. Neither person wanted to be identified because the negotiations are private.
