At the hearing tonight, the government has asserted that they told the representative of JP Morgan Chase, the lead bank among the senior lenders, that if they did not like the proffered deal, the senior lenders could credit bid. If true, and I assume that it is, why didn't the administration make this fact known weeks ago? The lack of transparency on this point simply served to increase fears that the government was throwing its weight around in the negotiations.
The hearing is in the home stretch, with one more closing argument to go.
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One response to “Chrysler & Credit Bidding, Again”
Bloomberg
In a footnote, they cited a requirement that any competing bid include 10 percent of the purchase price in cash. That “appears designed specifically,” to prevent non-TARP members from making a credit bid, using the full amount of their secured claim, they said.