Sorvino Weighs in on Obama's Involvement in the Chrysler Bankruptcy
Barack Obama is blaming a “small group of speculators” for Chrysler LLC's bankruptcy filing. The fund managers, who all own Chrysler debt, returned fire by accusing the U.S. President of flouting decades of bankruptcy law in his failed bid to force through a restructuring that would have avoided bankruptcy. Heidi Sorvino says, “he wants everyone to know that ‘Look, I'm for the little people.'” She also adds that the creditors are easy targets because “they're making all the money. Everyone hates them.”
The issue revolves around a well-known bankruptcy law called the absolute priority rule. It says secured creditors such as the holdouts are supposed to be paid out in full before unsecured creditors such as employees get anything. Sorvino says, “He [Mr. Obama] is saying ‘I know what the law says, but come on, everyone here is taking a hit, so you take it too.' We all know what the law is, but a lot of times we go out in the hallway and we strike a deal. Everyone throws in something.”
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