#34 – I disagree with your statement that Obama “changed the bankruptcy rules.” In actuality, he used the government’s TARP and TANF leverage on the secured creditors to force them to agree to terms in a prepackaged bankruptcy. Had the secured creditors been able to withstand the government’s pressure and hung together, the court would have had no alternative but to follow the classification rules for claims laid out in the Bankruptcy Code. The secured creditors would then have been first in line (after the attorneys, of course) for distribution of their rightful share of the bankrutpcy estate. Of course, there would have been massive litigation that to get to that point (called an “adversary proceeding” in bankruptcy), which would have taken years most likely. I think this is what the administration was desperate to avoid, because this would have put the UAW contracts out there for all to see.
