The Bailout Truth Squad throws a flag
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In our relentless effort to protect the truth during an election year, the Auto Bailout Truth Squad has convened again this week.
Today we look at a story from Bloomberg on Wednesday that stemmed from a TV interview conducted with Harvey Golub, the former chairman of the bailed-out financial and insurance giant AIG.
Remember AIG? It once required a $182.3 billion government bailout -- more than twice the amount the feds used to bail out the entire U.S. auto industry in 2008-2009.
Golub, incredibly, complained that the Obama administration “violated every bankruptcy principle known to man” in the rescue of General Motors and Chrysler, Bloomberg’s Craig Trudell wrote on Wednesday.
“One of the major elements of a bankruptcy is that debtors similarly situated get treated the same,” Golub told Bloomberg Television. “They changed the rules and bailed out the unions, not the companies.”
Golub, 73, who came to AIG after the bailout, now is chairman of Miller Buckfire, a New York investment banking and advisory firm that handles numerous large corporate bankruptcies. So he should know that Obama didn’t approve the GM or Chrysler bailouts. Federal judges did, through due process well established in U.S. bankruptcy law.
“As nobody can seriously dispute, the only alternative to an immediate sale is liquidation,” U.S. Bankruptcy Judge Robert Gerber wrote in July 2009 in approving the GM bailout plan, Bloomberg reported.
U.S. Bankruptcy Judge Arthur Gonzalez, who handled the Chrysler bailout plan with the government and Fiat S.p.A., wrote in his May 2009 approval that Chrysler “was faced with either accepting the Fiat Transaction or liquidating,” the Bloomberg story said.
The truth is this: Federal bankruptcy judges approved the bailouts. Not GM. Not Chrysler. Not Obama. Not the UAW.
And lest it be forgotten in election year distortions, the only president who acted unilaterally in bailing out GM and Chrysler was a Republican named George W. Bush. His administration gave the automakers $17.4 billion -- without the approval of a Bankruptcy Court judge.
You can reach Philip Nussel at email@example.com.