haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Sen. Corker: Loan conditions must fix automakers' problems | The Detroit News | detnews.com
Senator Bob Corker is holding up the auto bailout because he has his own plan. Here is a quote from his article today, describing one aspect of his plan.
"Our role should be swift and simple and centered around two areas where we can force immediate and transformative change: addressing the unworkable capital and labor structures that cripple these companies. I cannot support the proposed loan package as written by Democrat lawmakers and the White House because it doesn't tackle these critical issues.
To that end, I have put forth several measures that need to occur for any government-backed loan to be successful:
• One, give existing bondholders 30 cents on the dollar to help reduce their overall debt load.
Etc."
My question- how can this be legal? Doesn't it turn the founding priciple of bankruptcy law on its head? Senior ogligations are to be paid in full before junior obligations get anything. I know that this is often negotiated down, but Corker is proposing that equity remain in the stock, while the bondholders be forced to accept 1/3 face. True, 1/3 of face would be a step up from the present, but a midstream rule change that in my opinion would permanently ruin the faith in formal rules that any financial system has to have.
In addition, I own some auto bonds and this would piss me off personally , as I took considerable risk and would barely break even under his proposal.
I really don't like the trend US has taken over the past 9 months. I'd rather it all crashed under the rules if that indeed would happen, and we sort out what we could.
I may move to Nevada and go with sports betting. So far at least they don't move the goal-line because the losing team feels bad. To hell with Washington.
Ha
Senator Bob Corker is holding up the auto bailout because he has his own plan. Here is a quote from his article today, describing one aspect of his plan.
"Our role should be swift and simple and centered around two areas where we can force immediate and transformative change: addressing the unworkable capital and labor structures that cripple these companies. I cannot support the proposed loan package as written by Democrat lawmakers and the White House because it doesn't tackle these critical issues.
To that end, I have put forth several measures that need to occur for any government-backed loan to be successful:
• One, give existing bondholders 30 cents on the dollar to help reduce their overall debt load.
Etc."
My question- how can this be legal? Doesn't it turn the founding priciple of bankruptcy law on its head? Senior ogligations are to be paid in full before junior obligations get anything. I know that this is often negotiated down, but Corker is proposing that equity remain in the stock, while the bondholders be forced to accept 1/3 face. True, 1/3 of face would be a step up from the present, but a midstream rule change that in my opinion would permanently ruin the faith in formal rules that any financial system has to have.
In addition, I own some auto bonds and this would piss me off personally , as I took considerable risk and would barely break even under his proposal.
I really don't like the trend US has taken over the past 9 months. I'd rather it all crashed under the rules if that indeed would happen, and we sort out what we could.
I may move to Nevada and go with sports betting. So far at least they don't move the goal-line because the losing team feels bad. To hell with Washington.
Ha