« Texas infanticide bill would decriminalize murdering an infant | Main | Why? »

Lauria's Accusation that the White House Threatened Chrysler's Creditors has been Corroborated

Thomas Lauria, attorney for Chrysler's senior creditors, made the accusation that the White House threatened one of his clients, Perella Weinberg Partners, causing them to cave and accept the White House's offer of 29 cents on the dollar. Of course, the White House denied the accusation calling it "completely untrue."

The White House's flat denial has become a bit more complicated as we learn today that Lauria's accusation has been corroborated by two other creditors who were in the meeting with Obama administration officials. The Business Insider has details and they are pretty shocking:

Creditors to Chrysler describe negotiations with the company and the Obama administration as "a farce," saying the administration was bent on forcing their hands using hardball tactics and threats.

Conversations with administration officials left them expecting that they would be politically targeted, two participants in the negotiations said.

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.

The madman theory. The last time we heard that Nixon was president:

As Nixon told his White House Chief of Staff H. R. Haldeman:

"I call it the Madman Theory, Bob. I want the North Vietnamese to believe I've reached the point where I might do anything to stop the war. We'll just slip the word to them that, 'for God's sake, you know Nixon is obsessed about Communism. We can't restrain him when he's angry -- and he has his hand on the nuclear button' -- and Ho Chi Minh himself will be in Paris in two days begging for peace."[1]

So, is Obama channeling Nixon? Maybe Machiavelli?

Yes, the people who made these statements were kept anonymous, but who wouldn't be want to be under these circumstances?

What keeps going through my mind at this point, though, is what will the bankruptcy judge do? Judge Arthur Gonzalez has 200 years of bankruptcy law precedent that he applies with every bankruptcy that comes before him. Will he follow the law this time, which says these secured creditors get paid first and in full or as much as they can be, or will he bow to the pressure from the White House? I'm not accusing the White House of contacting the judge, but you know that he has to feel immense pressure right now. If he does not do as Obama wants, then he may find himself the target of left wing media and blog antipathy unlike anything he has experienced in his life. Judge Gonzalez was a trustee before being appointed a bankruptcy judge. Trustees represent the interests of the bankruptcy estate for the benefit of the creditors, so he knows full well what should happen here. The question is, will he actually follow the 200 years of bankruptcy law precedent or will he cave, too? And if he does cave, what happens to those 200 years of bankruptcy law precedent? We may not know for a while, as I expect Chrysler's senior creditors will appeal and take their case as high as they can.

Hat tip: Ed Morrissey at Hot Air


TrackBack

TrackBack URL for this entry:
/cgi-bin/mt-tb.cgi/35564.

Comments (24)

Again, I ask, are such tact... (Below threshold)
epador:

Again, I ask, are such tactics illegal or an abuse of power?

Where's the cry for a Special Prosecutor?

And I couldn't help chuckli... (Below threshold)

And I couldn't help chuckling at reading that both sources voted for Obama... I bet that wasn't the change they were hoping for.

Sounds a lot like extortion... (Below threshold)
Matt:

Sounds a lot like extortion to me. Wouldn't the RICO laws apply?

This is a lot worse than a BJ in the oval office.

"Again, I ask, are such ... (Below threshold)
Heralder:

"Again, I ask, are such tactics illegal or an abuse of power?"

I'm uncertain if it's illegal, it is unconstitutional. It most certainly is an abuse of power.

ss - And I coul... (Below threshold)
marc:

ss -

And I couldn't help chuckling at reading that both sources voted for Obama... I bet that wasn't the change they were hoping for.
Thomas Lauria donated to and voted for obama.

Now, just where is that U Dem, he was oh so sure no laws were broken despite signed contracts allowing 100% returns in investments by pensioneers, teachers' credit unions, personal retiree accounts, retirement plans and college endowments (as opposed to EVIL hedge funds obama demagogued), and just as sure Thomas Lauria was a liar.

What say you now u dem? (insert same stupid shit here _______ )

For the last 8 years execut... (Below threshold)
marc:

For the last 8 years executive power abuse was a focus (near life-blood it seemed at times) of dem outrage with the Bush administration.

Now, apparently not so much.

Now obama Democrats accent bullying over governing.

(*Sigh*)And again,... (Below threshold)

(*Sigh*)

And again, Obama was the candidate who promised bi-partisanship -- no, post-partisanship! -- and an end to corruption, secrecy, and politics as usual.

MeThinks <a href="http://ww... (Below threshold)
marc:

MeThinks this needs updating, Thomas Lauria has gotten smacked by the short wheelbase bus but at this point is missing.

Machiavelli?No, Ma... (Below threshold)
kawaika:

Machiavelli?

No, Machiavelli knew that stealing people's property would lead to revolt/rebellion. Most of our politicians have ignored Machiavelli's advice.

Has no one mentioned that t... (Below threshold)
Mister Tan:

Has no one mentioned that the Madman tactic was meant to be used against the NoKos, while Obama is using it against Americans?

Why not? He's already shown... (Below threshold)

Why not? He's already shown his mastery of the Big Lie Theory.

This is simple Chicago Poli... (Below threshold)
bnorm:

This is simple Chicago Politics in action. We've been telling folks for the last year+ that this is what we would get with Big 0 in office. I would just so love to say to all those who voted for Obama, "I told you so."

I'm afraid Don Obama will j... (Below threshold)
Thomas Jackson:

I'm afraid Don Obama will just make them an offer they can't understand. Tony Soprano wishes he could do what the thugs in the WH are doing.

I love this. I often wondered how Hitler came to power. Now I know.

So Adolphus is reborn..its ... (Below threshold)
914:

So Adolphus is reborn..its been happening every half century or so.. ? Move along.

Has no one mentioned that t... (Below threshold)
James Cloninger:

Has no one mentioned that the Madman tactic was meant to be used against the NoKos, while Obama is using it against Americans?

Funny you should mention that Nixonian tactic, because Ace HAS mentioned it:

http://minx.cc/?post=286862
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.

This from John at Po... (Below threshold)
MPR:


This from John at Powerline. Could not have said it better.
Barack Obama's lawless conduct in connection with the Chrysler bankruptcy is sending shock waves through the business community. It is important to understand what is happening here. Many think that Obama is merely engaging in crony capitalism, favoring his political supporters (most notably the Auto Workers Union) at the expense of others. That's true, of course, but it is much worse than that: Obama has tried to bully those who have not bought his favor--Chrysler's non-TARP secured creditors--into giving up their legal rights by threatening to use the powers of the White House to damage their businesses. This sort of lawlessness is common in some of the more corrupt Third World countries, but it is brand new to the United States.

Too bad he's not as tough w... (Below threshold)
ODA315:

Too bad he's not as tough with Iran.

Let's see........getting the UAW a sweetheart deal OR stopping a rogue nation from getting nukes......? Tough decision.

What was it they used to ca... (Below threshold)
bobdog:

What was it they used to call it when the State confiscates the property of the Proletariat and gives control of Capital to the Working Class?

Seems like I've heard this before somewhere, but I'm one of the last groups who were taught economics and actual history in school, and it was so long ago. That's in the Land Before Time, before the creation of political correctness, zero tolerance programs, free Ritalin and condom programs, sensitivity training, anti-bullying rules, the outlawing of Dodgeball, the takeover of the National Education Association, school busing, armed security guards, metal detectors and strip searches. Back before the Early Release Program.

You know, before the Idiocracy.

Guess the usual suspects ar... (Below threshold)
JLawson:

Guess the usual suspects are waiting for some talking points on how to spin this... or hoping it'll just go away if the media refuses to cover it.

Guess the usual suspects... (Below threshold)
mantis:

Guess the usual suspects are waiting for some talking points on how to spin this... or hoping it'll just go away if the media refuses to cover it.

I guess anonymous quotes posted on websites run by criminals who have been banned for life from the securities industry and fined $4 million for rampant fraud aren't compelling enough to even bother reacting to.

I do love that Kim thinks one anonymous quote corroborates another, as if they couldn't be coming from the same person.

Anyway, I guess this particular load of shit just didn't manage to stir up the "usual suspects," but hey, the judge thinks the hedge fund assholes are full of shit too.

These lenders, primarily investment firms, have said that the plan for the Fiat transaction ran afoul of bankruptcy law and would chill efforts by others to produce competing, potentially higher bids.

But Judge Gonzalez disagreed, saying, "The court concludes that the bidding procedures are appropriate and necessary."

The judge's decision was a victory for Chrysler and the government, which together argued that a speedy sale was the only way to protect tens of thousands of jobs and help along the American economy.

Mantis, are you defaming th... (Below threshold)
Zelsdorf Ragshaft III:

Mantis, are you defaming the reputation of the attorney Thomas Lauria? I do not think the anonymity of the internet will protect you from slander or libel action. That said, you overlook the fact Lauria was an Obama supporter and the type of law Mr. Lauria practices is seldom subject to public spotlight. I think that once again you Mantis are full of sh*t as usual.

mantis - Nothing to say ab... (Below threshold)
marc:

mantis - Nothing to say about Thomas Lauria?
I mean really, he's a named accuser, not Mr./Ms Anonymous?"

Is he a liar? Is someone who works for one of the most respected law firms in the country AND head of the bankruptcy arm of the firm a liar?

What about obama's demagoguery on "evil" hedge funds when in reality of the 30% hesitant to take this deal were also comprised of pensioneers, teachers' credit unions, personal retiree accounts, retirement plans, college endowments that have bought Chrysler debt under a legal contract that mandated a 100% payback?

Nothing to say about the executive branch going into the judicial branch which may be cause for Constitutional issues be raised.

And BTW, you do know your linked story and judges decision that occurred on Tuesday was after Lauria's clients knuckled under the alleged pressure from the WH and his ruling in no way casts any shadow on Lauria or his clients.

Thomas Jackson wondered how... (Below threshold)

Thomas Jackson wondered how Hitler came to (and, one supposes, how he remained in) power.

And the answer is: With no little assistance from the traitor, Roosevelt and from the other traitors, fascists, crypto-fascists, opportunists and profiteers (the mobbed-up Massechusetts Kennedys prominent among that gang) that were counted among the Roosevelt cronies and that comprised his richly-Soviet-agent-larded "administration."

Brian Richard Allen
Los Angeles CalifUBAMBIcated 90028
And the Far Abroad

mantis... and what of the <... (Below threshold)
marc:

mantis... and what of the just named firms that still stand against this plan?

Wonder why that is? Could it be they, at least until now, haven't bowed to obamas pressure and are actually standing up for the secured loans via their bond holders. (look-up secured loans as they relate to bankruptcy mantis)

Got anything to say on the lies that were told when Chrysler were given not one but two bailouts, you now the ones, it was said they would be paid back.

Now not so much.

Now the taxpayer is on the hook for $8 billion in "bridge loans" and 4 billion in bankruptcy financing.

And the future kicker is... they will still fail and disappear within 18 months.




Advertisements









rightads.gif

beltwaybloggers.gif

insiderslogo.jpg

mba_blue.gif

Follow Wizbang

Follow Wizbang on FacebookFollow Wizbang on TwitterSubscribe to Wizbang feedWizbang Mobile

Fresh Links

Credits

Section Editor: Maggie Whitton

Editors: Jay Tea, Lorie Byrd, Kim Priestap, DJ Drummond, Michael Laprarie, Baron Von Ottomatic, Shawn Mallow, Rick, Dan Karipides, Michael Avitablile, Charlie Quidnunc, Steve Schippert

Emeritus: Paul, Mary Katherine Ham, Jim Addison, Alexander K. McClure, Cassy Fiano, Bill Jempty, John Stansbury, Rob Port

In Memorium: HughS

All original content copyright © 2003-2010 by Wizbang®, LLC. All rights reserved. Wizbang® is a registered service mark.

Powered by Movable Type Pro 4.361

Hosting by ServInt

Ratings on this site are powered by the Ajax Ratings Pro plugin for Movable Type.

Search on this site is powered by the FastSearch plugin for Movable Type.

Blogrolls on this site are powered by the MT-Blogroll.

Temporary site design is based on Cutline and Cutline for MT. Graphics by Apothegm Designs.

Author Login



Terms Of Service

DCMA Compliance Notice

Privacy Policy