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Author Topic: Judge: Chrysler has good case for franchise cuts  (Read 1379 times)
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Miss Mia
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« on: June 04, 2009, 01:36:13 pm »

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Judge: Chrysler has good case for franchise cuts
Hearing on Chrysler's plans to terminate the franchises effective Tuesday

NEW YORK - The judge overseeing Chrysler’s bankruptcy case said Thursday that the automaker has a good case for the termination of 789 of its dealer franchises as part of its ongoing restructuring.

U.S. Judge Arthur Gonzalez said that under Chrysler LLC’s plan, those dealers, which represent about 25 percent of the company’s dealer base, will remain with “Old Chrysler,” a collection of assets that aren’t slated to be sold to a group led by Italy’s Fiat Group SpA.

Since those leftover assets won’t be making vehicles, there would be little use for the dealers that would go with them, Gonzalez said.

“If the sale would be consolidated, there’s a strong argument that no dealer network would be needed,” Gonzalez said at the beginning of Thursday’s court hearing. “Nevertheless, I think it’s still important to have this hearing.”

Late Sunday, Gonzalez issued a ruling approving the government-backed sale of most of Chrysler’s assets to a group led by Fiat. But the sale has been stayed pending an appeal filed by three Indiana state pension and construction funds. Arguments before the U.S. Court of Appeals for the Second Circuit are slated for Friday afternoon.

-snip-
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JohnBrowdie
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« Reply #1 on: June 09, 2009, 11:34:55 pm »

the seediest parts of the chrysler bankruptcy are the payoffs to the UAW for the millions that they donated to the obama campaign (a 55% stake in the company), the preference for unsecure creditors (the UAW again, unsurprisingly) over secure creditors (Indiana state pension funds), closing mostly dealerships in republican counties, and my personal fave, forcing the union with fiat so the italian carmaker can transfer the technology to make "smaller, more fuel efficient cars". 

that sound you just heard was a portion of your individual liberty disappearing.

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Wretched Excess
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« Reply #2 on: June 09, 2009, 11:49:48 pm »

The SCOTUS just green lighted the whole horror show, so it's going to fly.  or crash, as the case may be.

well, actually, the SCOTUS declined to intervene on grounds that may not apply to the GM bankruptcy case.
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Vonne
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« Reply #3 on: July 03, 2009, 10:00:44 pm »

the seediest parts of the chrysler bankruptcy are the payoffs to the UAW for the millions that they donated to the obama campaign (a 55% stake in the company), the preference for unsecure creditors (the UAW again, unsurprisingly) over secure creditors (Indiana state pension funds), closing mostly dealerships in republican counties, and my personal fave, forcing the union with fiat so the italian carmaker can transfer the technology to make "smaller, more fuel efficient cars". 

that sound you just heard was a portion of your individual liberty disappearing.

While quite aghast at the whole fiasco, on several fronts.  I really don't see how this is a wavering of liberty.  One can't mandate how something unfolds, when you require help.  If you wish to maintain the liberty of complete control, you must remain solvent!  They failed, hence they had to cede much control.

The portion of the new company being given to the UAW, is to take over the claims for the pension funds which were so dramatically underfunded.  While they perhaps were not first in line, in a typical bankruptcy scenario.  I really don't think there is anything typical when you're dealing with companies this large, and surely the Pension Guarantee Board was terrified of taking it over. 

As for that Indiana State Pension fund, I'm sorry for my lack of sympathy.  But did they not buy those bonds, for pennies on the dollar, as more savvy investors ran away, willing to take whatever they could find to unload the bonds?  Did not the bankruptcy judge determine that they'd receive more with a structured bankruptcy as it was, than the alternative.  They took a gamble, and lost, I think we all saw that one coming.
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JohnBrowdie
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« Reply #4 on: July 07, 2009, 02:47:43 pm »

While quite aghast at the whole fiasco, on several fronts.  I really don't see how this is a wavering of liberty.  One can't mandate how something unfolds, when you require help.  If you wish to maintain the liberty of complete control, you must remain solvent!  They failed, hence they had to cede much control.

The portion of the new company being given to the UAW, is to take over the claims for the pension funds which were so dramatically underfunded.  While they perhaps were not first in line, in a typical bankruptcy scenario.  I really don't think there is anything typical when you're dealing with companies this large, and surely the Pension Guarantee Board was terrified of taking it over. 

As for that Indiana State Pension fund, I'm sorry for my lack of sympathy.  But did they not buy those bonds, for pennies on the dollar, as more savvy investors ran away, willing to take whatever they could find to unload the bonds?  Did not the bankruptcy judge determine that they'd receive more with a structured bankruptcy as it was, than the alternative.  They took a gamble, and lost, I think we all saw that one coming.

i wasn't talking about chrysler's liberty, i was talking about the liberty of those that may have wanted actual control over what sort of car that may want to buy, or that of the former shareholder's, who's interests were sacrificed to the UAW.  and why are the UAW's "claims" superior to any of the company's other creditors?

and you are a ware of what's happening in the rest of the country regarding pensions, I assume?  they are being frozen at current levels, and the plans are being discontinued.  why do the UAW's pensions plans have a superior claim to, say, mine?  the answer is "because the authority of the federal government dictated that it be that way".

it isn't a problem of "too big to fail".  the issue is "political favors owed". 
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Vonne
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« Reply #5 on: July 19, 2009, 11:36:14 am »

i wasn't talking about chrysler's liberty, i was talking about the liberty of those that may have wanted actual control over what sort of car that may want to buy, or that of the former shareholder's, who's interests were sacrificed to the UAW.  and why are the UAW's "claims" superior to any of the company's other creditors?

and you are a ware of what's happening in the rest of the country regarding pensions, I assume?  they are being frozen at current levels, and the plans are being discontinued.  why do the UAW's pensions plans have a superior claim to, say, mine?  the answer is "because the authority of the federal government dictated that it be that way".

it isn't a problem of "too big to fail".  the issue is "political favors owed".

I'm not sure how your liberty to purchase a car has been infringed upon.  No one is forcing you to purchase a vehicle or a particular vehicle from any given manufacturer.  The liberty of choosing how to spend your savings is still yours.  If you're crying foul over the potential future model line up by a company which our government now has a stake in, I still don't really see that as an issue of liberty.

I really don't see how the former shareholders faced a loss of liberty either.  Any of those shareholders could have stepped up and chosen to pay off the companies debts, so that their stock holdings would still be of value.  Instead, they tried to write off their debts, and by doing so relinquished their claims to the companies assets. 

The UAW's claims were primarily related to vested pension obligations.  Non-vested pension plans have already been contractually modified.
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