re: #435 SixDegrees

Not exactly. In a Chapter 11 bankruptcy, management proposes a Chapter 11 plan for the bankruptcy corporation that strips away bad contracts, and restores the bankrupt to competitive status. Management in this case is the U.S. government. If management fails to propose a plan, creditors may do so.

Creditors get to vote on the plan. Senior secured creditors are in a voting category separate from junior unsecured creditors and unsecured creditors. What the lawyer said is that the U.S. government made loans to Chrysler without getting a priority position senior to that of the senior secured creditors. In short, thanks to Obama, the government is in a junior voting position, and is likely to lose at least part of its investment in Chrysler to the senior secured creditors. Smart work, guys!