Obama to Hedge Funds: Take That

Jeffrey Feldman writes about Obama's statement today on the Chrysler settlement:

On the 101st day of his Presidency, Barack Obama finally slapped the hedge
funds across the face like they deserved. In his statement about the
Chrysler bankruptcy and subsequent restructuring into a "Chrysler-Fiat
Alliance," President Obama made it perfectly clear that not all the stakeholders
at the table stepped up in good faith for the good of the company or the good of
the nation. Some stakeholders were simply in it for themselves.

Framing his statement about Chrysler in terms of
"shared sacrifice," President Obama elaborated on "substantial financial
contribution" of the Canadian government, the massive debtor-in-possession
financing offered by the U.S. taxpayer, and the significant sacrifices made by
the UAW to guarantee that Chrysler could emerge from bankruptcy a stronger more
viable company in alliance with Italian automaker Fiat.

But there were some parties, according to the President, who deserved
mention only for their unwillingness to join the effort (emphasis added):

"While many stakeholders made sacrifices and worked constructively in
this process, some did not. In particular, a group of investment firms and hedge
funds failed to accept reasonable offers to settle on their debt. In order to
effectuate this alliance without rewarding those who refused to sacrifice, the
U.S. government will stand behind Chrysler's efforts to use our bankruptcy code
to clear away remaining obligations and emerge stronger and more
competitive."

Yes, America. What we read in that statement is the first, high
profile, no nonsense, slap across the face, ouch that hurts, there's plenty more
where that came from, the law and the nation is on our side, Commander in Chief
hedge fund smack down. May it be the first of many, many more to
come.