Last week a group of hedge funds that had invested in Chrysler bonds “came out with guns blazing”, in hedge fund terms anyway, against the administration’s 33 cent on-the-dollar settlement offer, forcing the automaker into bankruptcy in spite of the president’s stern verbal appeals for everyone involved to make a “sacrifice.” But most observers agreed the holdouts were not likely to get much higher than 30 cents in any bankruptcy court, and some of them undoubtedly would have made a profit under the terms of the Obama deal, as this Bloomberg story points out: in March, after all, Chrysler bonds traded as low as 13 cents.
This is a companion discussion topic for the original entry at https://talkingpointsmemo.com/?p=143138