Lucid Links (052809, Morning)

Noteworthy Net-Worthies:

Tuesday, a federal judge “denied …. a request by a dissenting lender group to delay bankrupt automaker Chrysler LLC’s sale hearing and remove the bankruptcy case to district court.” The request came from Indiana funds representing teachers and law enforcement whose rights as first-lien secured bondholders were strong-armed away in the government-driven bankruptcy reorganization. But the judge curiously said that “objecting parties should have a ‘fair’ opportunity to appeal the bankruptcy judge’s ruling on the sale at a later date.” The bankruptcy judge gave the litigants their day in court yesterday, and is reported to have “offered no hint of whether it would slow or scuttle the sale of Chrysler.” The future credibility of creditors’ contract-law rights would seem to hang in the balance.

The betting appears to be the government’s roughshod run over creditors’ contractual rights will enable Chrysler to emerge from bankruptcy pretty quickly. In the process, the myth that the government hasn’t been propping up a completely failed business has been blown to bits. Here are a couple of quotes from a May 22 Reuters piece. First, “Even Chrysler’s own executives thought bankruptcy for the carmaker would mean liquidation.” Second, “In the absence of having someone like the government continue to put in money, you can see that the company would go into liquidation in just a few weeks.”

Speaking of throwing money around, the government’s stake in a reconstituted General Motors, thought to be 50% not too many days ago, will now apparently be “as high as 69%.” (Update: Make that 72.5%.) Because unsecured bondholders rejected the government’s ridiculous offer of only 10% of the company in exchange for $27 billion of debt forgiveness, CNBC says that “the largest industrial bankruptcy in U.S. history is now all but certain.” In hindsight, the fact that the government’s offer to the unsecured bondholders was so obviously inadequate should cause people to wonder if bankruptcy has been their real objective for some time.

Bill O’Reilly doesn’t know the difference between a blog post and a blog comment. Zheesh.

The next time some lefty whines about how state and local governments need to be bailed out because they’re being starved by stingy, short-sighted taxpayers and voters, show them this list (Warning: Certain blood-boil alert; HT Michelle Malkin).