Bailout on the Brink Judge Set to Rule on Case that Could Reverse Auto Bailout

[Rockntractor]

BY: Bill McMorris
December 6, 2012 3:03 pm

A New York federal judge may rule imminently on a case that could reverse the General Motors (GM) bailout and send the company back into bankruptcy, according to sources close to the case.

At issue is a backroom deal hatched by GM to fulfill the Obama administration’s demand for a quick bankruptcy, draining the automaker of nearly all of its cash on hand and leaving it in worse shape than it was when it collapsed in 2009.

One condition of GM’s bailout was to shore up its overseas subsidiaries. On the eve of entering bankruptcy, the company cut a $367 million “lock-up agreement” with several major hedge funds to prevent GM Canada from failing. The agreement ensured that GM could spin-off its liabilities to “old GM,” while using a multi-billion dollar bailout to create a new company.

All of that could be reversed if bankruptcy Judge Robert Gerber reopens the process and rules in favor of old GM trustees, who are suing the hedge funds at the center of the lockout agreement.

Read More>http://freebeacon.com/bailout-on-the-brink/

[Bailey]

No chance of the bailout being reversed.

[m00]

...hedge funds at the center of the lockout agreement.

Okay, that makes sense. I was wondering who Obama was paying off with the GM bailout. The unions didn't make out well enough for it to be them. Hedge fund managers though... that's more Obama's style.

Where is PeterS?

[Elspeth]

...hedge funds at the center of the lockout agreement.

Okay, that makes sense. I was wondering who Obama was paying off with the GM bailout. The unions didn't make out well enough for it to be them. Hedge fund managers though... that's more Obama's style.

Where is PeterS?

Obama is Wall Street's servant.

[m00]

Obama is Wall Street's servant.

Yep. It's bizarro world. For all the liberal talk of the evil Wall Street, and evil Banks... as you said, Obama more than any other President in my lifetime is their servant. Not to beat a dead horse, but the Republican nominee really should have been someone with the credibility to hammer Obama on this issue.

[Rockntractor]

The unions didn't make out well enough for it to be them.

The bondholders would beg to differ with you.

[m00]

The bondholders would beg to differ with you.

From what I've read, the unions got 93% of what they were owed while the bondholders got 10% of what they were owed. Bondholders were completely screwed, the unions weren't. What I'm saying is that I believe the auto bailout was a payoff -- but if it was a payoff to unions it would be more than 93%. I guess in my mind, Unions avoided getting screwed (cuz well, Unions are a vote machine for Democrats) but they aren't rolling in it at 93%.

But if the hedge funds made out like bandits, then it kind of makes sense.