Thursday, May 21, 2009

Some Chrysler creditors are fighting back

Until now it looked as if the Obama administration would have an easy time confiscating assets of Chrysler senior creditors to give to its union allies. Administration threats against these creditors were enough to cause some of them to agree to abandon their rights.

However, the managers of these investment groups have a fiduciary responsibility to their investors to protect their assets, and there has been talk that these investment managers may be subject to investor lawsuits for failing to defend their rights.

Whatever the reason, several Indiana pension funds have filed suit to block the proposed restructuring, and it appears other previously intimidated creditors may join them.

Obama's planned expropriation of Chrysler may not have such an easy time of it after all.

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