Lawyer: Chrysler bondholder "was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal"
Speaking of the politicized auto bailout, here's ABC News correspondent Jake Tapper, reporting on a claim of White House arm-twisting of Chrysler creditors:
A leading bankruptcy attorney representing hedge funds and money managers told ABC News Saturday that Steve Rattner, the leader of the Obama administration's Auto Industry Task Force, threatened one of the firms, an investment bank, that if it continued to oppose the administration's Chrysler bankruptcy plan, the White House would use the White House press corps to destroy its reputation. […]
Thomas Lauria, Global Practice Head of the Financial Restructuring and Insolvency Group at White & Case, told ABC News that Rattner suggested to an official of the boutique investment bank Perella Weinberg Partners that officials of the Obama White House would embarrass the firm for opposing the Obama administration plan, which President Obama announced Thursday, and which requires creditors to accept roughly 29 cents on the dollar for an estimated $6.8 billion owed by Chrysler. […]
Perella Weinberg Partners, Lauria said, "was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House press corps would destroy its reputation if it continued to fight. That's how hard it is to stand on this side of the fence."
Lauria's story was denied by the White House. And, as of Thursday, by Perella as well, who fired Lauria and suddenly decided that maybe the White House deal wasn't so bad after all.
Whole thing here. For some valuable critiques of the auto bailouts, I recommend Mickey Kaus. I debated lefty economist Dean Baker about the bailouts over at the L.A. Times last month.