One of the fundamental economic and monetary protections we have in this country is in the area of secured, prioritized loans. In fact, we have an entire area of law devoted to secured interests in property and how these interests take priority in bankruptcy proceedings. This amounts to the RULE OF LAW. THESE RULE PROTECT INDIVIDUALS… THESE RULES ARE SET IN STONE… ARTICLE 9 OF THE UCC… at least, they were, before Obama started dictating who the auto industry’s winners and loosers were going to be.
Recently, a number of Republican lawmakers have gotten concerned about the way in which the rule of law is being ignored and subverted by the Obama administration… and rightly so. For those of you who care about being protected from the power of the federal government… who care about the rule of law… you should also take note of what is happening:
WASHINGTON, May 22 (Reuters) – Four U.S. Republican lawmakers have complained to Treasury Secretary Timothy Geithner that a plan to restructure automaker General Motors Corp (GM.N) subverts the rights of bondholders, according to a letter from the lawmakers obtained by Reuters on Friday
A proposed restructuring favors the claims of the United Auto Workers union “over the rights and claims of the company’s diverse group of bondholders, who collectively hold $7 billion more in General Motors debt than the UAW’s health trust and are equal members of the creditor class,” the lawmakers said.
“Bondholders must have a seat at the table during negotiations in how the company would be restructured,” said the letter to Geithner from Representatives Jeb Hensarling, Eric Cantor, Mike Pence and Pete Sessions.
“We are extremely concerned that in the name of restructuring General Motors, the Presidential Task Force on the Auto Industry … has begun waging what some believe amounts to a war on capital: contractual rights of investors are being trampled by the government under the rationale of ‘extraordinary circumstances,’” the lawmakers wrote.
Kudos to Jeb Hensarling, Eric Cantor, Mike Pence and Pete Sessions. Way to stand up for those being trampled by the Obama administration.
via US House Republicans back GM bondholders in talks | Reuters.