On Sun, May 3, 2009 at 7:22 PM, Gruss  wrote:

>
>
> But the way it typically works is that per-bankruptcy you bring all
> the creditors into a room and get concessions; for those not willing
> to give, you take 'em to court.
>
> So, yeah, the message should be you play ball or you explain it to the
> public.


Here is an interesting problem, then. On the one hand, the government is now
going to be a shareholder in Chrysler, so the administration has a clear
interest in getting the best deal for the company in BK. On the other hand,
the government is going to end up as a significant shareholder in companies
represented by the bond holders- companies like Citi. So the government has
a clear interest in getting the bond holders the best deal possible. Instant
conflict of interest.

This is one of the reasons why government ownership is a bad idea and never
works as well as private ownership.


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