From Automotive News:
Chrysler LLC’s lawyers have taken the unusual step of asking a judge to give their fees special priority, which attorneys on the case said suggests unsecured claims such as trade debts won’t be paid.
Chrysler’s lawyers from Jones Day, have asked for “superpriority” in determining the order of payment, as did Chrysler’s financial advisers, Capstone Advisory Group. In court documents, the firms said they are going to incur large fees and as such would be extending Chrysler significant amounts of credit.
OK, so now the attorneys handling Chrysler’s bankruptcy want to be paid before anyone else. So how is this different from the secured bondholders wanting to be paid before the unsecured debt-holders? Well, at the moment, the President isn’t taking sides. From Real Clear Markets:
…the President went ballistic. He broke off the negotiations, and went on national television the next day (April 29) to publicly take sides in the matter, announcing his own version of a settlement. The UAW would get 55% percent of Chrysler. Italy’s Fiat would get 20% in return for NO CASH, but rather some unspecified small-car technology. And Chrysler would receive an additional $8 billion in taxpayer money.
Meanwhile, the President went out of his way to single out the investor group, angrily denouncing them as people looking to profit unreasonably from the situation (since when is losing 62% of your investment a profit?). And he said, ominously, that he “does not stand with them.”
And attorney’s don’t work to earn money and profits? The only time they work pro bono is if the court orders it or they need a tax break.
So now I have a question for President Obama: Are you going to go on national TV and demonize these attorneys the same way as you did the bondholders as being a bunch of greedy bastards?
I didn’t think so…