Thread: White House "Directly Threatened" Perella Weinberg

White House "Directly Threatened" Perella Weinberg Over Chrysler


John Carney|May. 3, 2009, 12:14 PM


The White House threatened to use the White House press corps to besmirch the reputation of one of the financial firms that holds Chrysler debt, according to a prominent New York bankruptcy lawyer. If true, the explosive charge shows that the White House was willing to go much further than is widely known to have its way in the attempt to restructure the Detriot automaker.

"One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight...That was Perella Weinberg," Tom Lauria, the head of the bankrutpcy department for top New York City lawfirm White & Case, told a WJR 760 radio host.

Perella Weinberg had been one of the firms that was resisting the Obama administration's plans for restructuring, alongside Stairway Capital and Oppenheimer Funds. The group had argued that their position as senior creditors gave them legal rights to be paid in full before junior creditors were paid. They had put forth a counter-offer under which they would have received far less than the face-value of the debt they held, but more than the Obama adminstration had proposed. This compromise deal was rejected by the administration, and the holdouts were characterized by the president himself as unwilling to make sacrifices for the common good.

After intense political pressure, Perella Weinberg defected from the dissenters and agreed to the administrations plans. The majority of senior creditors, including several large banks such as JP Morgan Chase, had already agreed to the plan. Some critics charge that the administration used its leverage as the provider of TARP funds to force banks to comply. Lauria's charges suggest that the administration had to get even rougher with financial firms that haven't taken bailout money.

The suggestion that the adminsitration would direct the White House press corps, composed of newspaper reports and other journalists who cover the Whtie House, to ruin the reputation of holdouts is sure to raise the ire of people who prize media independence. It's not clear whether this was an idle threat or whether the White House believes it exercises this level of control over the journalists asigned to cover it. It harkens back to the dirty tricks tactics of past administrations, and suggest a cavalier attitude toward the exercise of political power to control the actions of private citizens.

One test of whether the White House press corps is as compliant as the White House seems to believe will be how they handle Lauria's charge. The story has not yet been picked up by the traditional media. The blog Zero Hedge, a new but well-read financial blog, picked up the story and posted a downloadable excerpt from the radio interview. (You can download the clip below.)

The charge also undermines a key administration claim about the Chrysler restructing plan. It has insisted that the plan was reasonable, and held up the fact that the majority of senior creditors approved it as eveidence of this reasonableness. If the approvals were obtained through threats, however, theyt would indicate nothing more than a fear of crossing the administration.


www.businessinsider.com

I heard the White House was insisting that the union be paid before the creditors. That's contridictory to bankruptcy laws.

Dixie

Chrysler socialized, union to own bulk of automaker

By Freddie Mooche

(AXcess News) Washington - The Democrats lived up to their campaign promises to union leaders in seeing that the auto union ended up with the largest share of ownership in Chrysler, shocking European leaders with the Obama administration's socialistic behavior.

Chrysler attorney Corinne Ball told reporters in New York following the Company's initial bankruptcy hearing in Manhattan that Fiat Group SpA would get the bulk of Chrysler's assets.

The quick-track bankruptcy plan takes into consideration a further $4.5 billion bailout cash injection from the Obama administration.

Judge Arthur Gonzalez approved six motions in less than an hour. One of which was to permit Chrysler to pay $48.8 million in employee and contract worker pre-bankruptcy wages, benefits and businesses expenses. The motion also references an estimated $86 million in employee vacation benefits that it may not ultimately have to pay.

The Judge also gave Chrysler the Court's approval to continue banking practices and warranties.

But what Gonzales didn't weigh in on was the $6.9 billion of Chrysler debt.

Thursday, President Obama openly criticized lenders for not going along with a reorganization plan while praising union leaders.

This morning the White House said Chrysler would emerge from bankruptcy within one to two months, though how such a huge bankruptcy case - and the outcome of the Court - could be publicly decreed by the government ahead of Judge Gonzales' ruling disturbed foreign leaders who've openly accused Obama of moving America towards a more socialistic government than even European nations practice.

http://www.axcessnews.com/index.php/art ... w/id/17929

INTERESTING

Remember ACORN, ‘strong arm tactics’, etc, etc..?

Not much to say except..

BIG PS: STOP the chaos..!! This so-called ‘administration’ IS a farce..!! Bust the fascist-marxist usurper & his mafia gang NOW..!! www.alipac.us/ftopict-137238.html AND www.TheObamaFile.com