While the judge in the NHL case has yet to approve this request, I am sure that there are lots of other cases that are now going to ask for the same exception. The Obama administration is able to take some money from the Chrysler and GM bond holders, but at what cost? One wonders how much interest rates are already going up because of this increased risk. From the WSJ
Within days of a bankruptcy-court judge's approval of the government's plan to sell Chrysler to Fiat SpA and leave creditors with big losses, a lawyer in the bankruptcy case of the National Hockey League's Phoenix Coyotes invoked Chrysler in trying to push through the speedy sale of the team.
Should the judge approve that move and allow the Coyotes to be sold quickly, as Chrysler was, it could put some creditors out in the cold, leaving the NHL and other investors without the kind of input typically afforded by bankruptcy law. . . .
"The concern is that you have thousands of lenders, hedge funds, insurance companies who model their investments on rules and laws," said Stephen Lerner, a lawyer for a committee of Chrysler dealers. "How do these folks make investment decisions when they're faced with bankruptcy courts that appear to disregard the rules?" . . . .
Labels: bailout, bankruptcy