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U.S. Involvement in GM Won't End With Bankruptcy
Feldman also added that the "President doesn't negotiate second rounds," and wrote, "We've protected your management and board. And now you're telling me to bend over to a terrorist like Lauria? That's BS." Tom Lauria is a bankruptcy attorney for White & Case, the firm that has been representing senior lenders that have objected vigorously to the sale. Obama has blamed those lenders for forcing the automaker into bankruptcy. The e-mails, along with other communications, were turned over to the court by the Treasury.
In another e-mail exchange, one of Chrysler's attorneys characterizes the June 15 deadline for the sale as "hurried" and an "effort to stuff the judge." Chrysler lawyers, who tried unsuccessfully to block the messages from being entered into court, have argued repeatedly that Chrysler is a wasting asset and that a speedy bankruptcy proceeding was critical to the automaker's viability.
Last night, a Treasury spokesperson said in a statement that "the task force made every responsible effort to avoid bankruptcy, including a last minute effort to achieve 100% consent of the senior lenders."
Under questioning from Kurtz, Manzo said his firm, Capstone Advisory Group, which has already been paid $9 million for its services by Chrysler, would receive $17 million more upon the consummation of the sale, $10 million of which Manzo would personally receive. Manzo was asked whether that was incentive enough for him to make the sale happen, and he responded that though it was a lot of money, it was not enough to buy his integrity. Gonzalez later noted that such fees are customary in bankruptcy proceedings.
Earlier in the day, Gonzalez denied a request by Indiana state pension funds for a continuance of the sale hearing. The lenders, represented by Kurtz, contend that the government-orchestrated sale of Chrysler violated their rights as senior secured lenders to the automaker, and that under the proposed sale they would recover less than junior lenders. The Indiana funds collectively hold about $42 million of the $6.9 billion in senior secured debt.
Gonzalez said during the proceedings last night that he did not expect to rule on the sale until at least Thursday, possibly Friday.
Last night Fiat executive Alfredo Altavilla testified that he, Fiat chief executive Sergio Marchionne and former Exxon Mobil director Lou Noto would serve on the new Chrysler's board.
Tse reported from New York. Staff writers David Cho and Kendra Marr in Washington contributed to this report.