Auto Bailout Loss Could Exceed $70 Billion – Tea Party Nation

Auto Bailout Loss Could Exceed $70 Billion – Tea Party Nation.

Posted by Seton Motley

Note: This first appeared in Breitbart.com’s Big Government.

 Courtesy of the $83 billion auto bailout – on which we are already poised to lose more than $40 billion – We the Taxpayers are stuck with 26% stock ownership of General Motors (GM).

 Things could soon get much worse.

 Judge Set to Rule on Case That Could Reverse Auto Bailout

 A New York federal judge may rule imminently on a case that could reverse the General Motors bailout and send the company back into bankruptcy….

 At issue is a backroom deal hatched by GM to fulfill the Obama administration’s demand for a quick bankruptcy, draining the automaker of nearly all of its cash on hand and leaving it in worse shape than it was when it collapsed in 2009….

 On the eve of entering bankruptcy, the company cut a $367 million “lock-up agreement” with several major hedge funds to prevent GM Canada from failing. The agreement ensured that GM could spin-off its liabilities to “old GM,” while using a multi-billion dollar bailout to create a new company….

 “(Judge Robert Gerber) has made it very clear that he is greatly dissatisfied with the process,” one analyst told the Washington Free Beacon in October. “He’s basically implying that GM hid it from him and that reopening the sale is a possibility.”…

 “In this particular situation, there’s $1.3 billion in liabilities, but that’s just what’s officially back on the table if the court rules for old GM,” said a bankruptcy expert close to the negotiations. “If those go back on the table then everything could be back on the table and [new GM] would have to address them.”

 Those liabilities, which include old GM’s debt and product liabilities that pre-date bankruptcy, are valued at $30 billion, a sum that would wipe out the company’s $34.6 billion cash reserves.

 We may be on the verge of adding another $31.3 billionat least – to the auto bailout loss tally, pushing the total to over $70 billion.

 The reversal would cause GM’s stock to plummet even further.  And again, we own 26% of the mess – meaning we’d lose even more coin.

 And then there are the other, troublingly similar lawsuits.

 Spyker Sues GM for $3 Billion Over Saab Bankruptcy

Spyker claims that GM purposely sent Saab into bankruptcy by blocking a deal with a Chinese car manufacturer.

 And more lawsuits will follow should the entire bankruptcy be undone.  How many millions or billions in GM legal fees and potential damages will this cost?

“(I)f all the liabilities come back to roost, short that stock,” the bankruptcy expert said.

 We the Taxpayers wish we could.

 

Government Motors is What Obama Wants to Do to ‘Every Industry’ – Tea Party Nation

 

Government Motors is What Obama Wants to Do to ‘Every Industry’ – Tea Party Nation.

Posted by Seton Motley

Note: This first appeared in Breitbart.com’s Big Government.

President Barack Obama on Thursday uttered the following utterly absurd thing:

“I want to (bailout) manufacturing jobs, not just in the auto industry, but in every industry.”

Even before President Obama dramatically bumped up the auto bailout to $82 billion, we were saying that this government-funded Crony Socialism model is what he has in mind for the entire once-private sector economy.  He’s just now openly asserting it.

 

So let’s take a look at the auto bailout nightmare mess – and marvel at what President Obama wishes to multiplicatively replicate.

 

(If some of the following sounds recently familiar, you must listen to gracious radio host-exemplar Mark Levin.)

 

  • During the bankruptcy process, President Obama illegally paid off the UAW first and in full – before secured bondholders who should have been made whole before anyone else got a dime.  Which was incredibly disruptive and destructive of the entire bond market.  Economic uncertainty, anyone?
  • Meanwhile, President Obama cut the pensions of non-union GM-subsidiary Delphi’s employees by up to 70%.
  • President Obama illegally carried forward through the bankruptcy the ridiculously exorbitant UAW contracts.  Which were a hay-yuge contributing factor to GM going under in the first place – and are again, predictably, helping to wreck the bottom line.
  • Why has the stock tanked so precipitously?  Because GM is no longer a for-profit car company – it is a Leftist ideological entity.  To wit:
  • We the Taxpayers pay $7,500 per Volt sold in bribe money – I mean incentive.  And in President Obama’s latest unanimously rejected budget he wanted to up that to $10,000 per.

 And so on, and so on, and….

 All of this slow-motion train wreck-litany – is President Obama’s vision for how we should from now on do all things economy.

 Because for this President, “success” doesn’t mean greater free market achievement – it means greater government control.