Chrysler plan objectors disappearing

The number of creditors objecting to the Chrysler-Fiat-Treasury plan appears to be dwindling, if a motion filed today by the “Attorneys for the Chrysler Non-TARP Lenders” (Thomas Lauria, who claimed death threats as the sole named attorney) is any evidence. 

In part II, the document tellingly describes the “Non-TARP Lenders” as holding “over $300 million of first priority secured claims” of the $7 billion in senior debt issued in 2007. The amount in question was quoted as being higher in earlier reports, possibly indicating some dropouts. 

The document filed starts with an anti-Obama rant and continues an emotional appeal for anonymity, stating that denial “will force several of these lenders to surrender their legal rights and agree to the government’s illegal plan.” It later referred to the UAW as an “unsecured creditor,” though the VEBA plan is not a loan but a contractual obligation which has already been dramatically reduced through negotiation, in the same way that secured loans were reduced. 

In general, Lauria’s language is shrill and relies on unsupported assertions, such as “Chrysler stopped functioning as a private company and became an instrument of the government” and “The President made clear that his strategic vision for Chrysler required Chrysler to restructure itself … so that Chrysler can produce the type of smaller cars the government wants manufactured, satisfy the demands of union laborers, and protect the government’s investment in Chrysler – all components of a political agenda imposed on Chrysler’s management.”  Lauria also claims the “unions” will receive $10 billion worth of stock, an interesting valuation given that it puts the value of Chrysler as a whole at nearly $20 billion. Much of this rhetoric was designed to show that President Obama has orchestrated an atmosphere of hatred against the non-TARP lenders.

Lauria later suggested that the lenders could achieve better than a 40% reduction in debt through Chapter 7 liquidation, which would involve auctioning Chrysler’s assets in one of the worst worldwide markets since the Depression.

As evidence of the death threats which are supposedly frightening his clients into needing their company names to be kept secret, Lauria quoted from comments on the Washington Post web site, which refer to hedge funds as being criminal and, in some cases, call for execution of the hedge fund managers. These threats are apparently far more serious than nearly identical postings regarding the union managers, heads of TARP banks, and Obama himself.