As of early Tuesday evening, according to a report by Liz Moyer at Forbes, the latest news on the Chrysler bankruptcy filing is that:
- The recalcitrant non-TARP lenders who would not agree to the deal the government attempted to force on them are now attempting to challenge the deal the government and Chrysler have proposed in bankruptcy court.
- These lenders want to keep their identities hidden.
- In court documents, they have said that "intensifying pressure and name calling by the government threatened to harm them if their identities became public."
- Bankruptcy judge Arthur Gonzalez "isn't buying it," and has given the lenders until 10 a.m. tomorrow morning to identify themselves or (though not specifically stated) they will apparently lose their standing in court.
Meanwhile, John Carney at The Business Insider today expanded on what the lenders' lawyer Tom Lauria first brought out on WJR Radio on Friday, when Lauria told talk-show host Frank Beckmann that "One of my clients was directly threatened by the White House."
..... 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.
One participant in negotiations said that the administration's tactic was to present what one described as a "madman theory of the presidency" in which the President is someone to be feared because he was willing to do anything to get his way. The person said this threat was taken very seriously by his firm.
..... These allegations add to the picture of an administration willing to use intimidation to win over support for its Chrysler plans--and then categorically deny it.
Clifford S. Asness, who in a public letter at the Business Insider, rips the administration's tactics, and expresses an understanding that "one by one the managers and banks are said to be caving to the President’s wishes out of justifiable fear."
So .... the national press is all over this outrage of executive overreach, right?
Uh, not exactly.
Judge Arthur Gonzales says the procedures proposed by Chrysler's lawyers represent a "clear and orderly process."
Attorneys for Auburn Hills, Mich.-based Chrysler LLC argued that the automaker had essentially been up for sale for most of the last two years and a speedy sale was needed in order to preserve the value of the company's assets.
But those representing a dissident group of Chrysler lenders said more time was needed for other potential buyers to do the research they needed to make an appropriate offer.
A 5:43 p.m. AP story is about how some elements of Chrysler's latest concessions agreement with the United Auto Workers union might be helpful to General Motors as it enters the financial netherworld.
Zzzzz, ..... Zzzzz. Oh, I'm sorry.
The New York Times, in a report by Michael J. de la Merced and Jonathan D. Glater, does note the threats and Gonzales's ruling, and has the following at its second-last paragraph.
When the debtholders, calling themselves the Committee of Non-TARP Lenders, made their first public statement last Thursday, they said their group consisted of about 20 investment firms holding about $1 billion. According to their motion to file under seal, the group now claims about $300 million in holdings.
de la Merced and Glater were apparently not curious about the possible reasons why the amount involved, and presumably the number of holders, is significantly lower than it was just a few days ago.
Maybe it's because the threats are real, guys.
Cross-posted at BizzyBlog.com.