The Chicago Way

Threats to Chrysler Creditors Corroborated. [Link]

Thomas Lauria, attorney for Chrysler's senior creditors, made the accusation that the White House threatened one of his clients, Perella Weinberg Partners, causing them to cave and accept the White House's offer of 29 cents on the dollar. Of course, the White House denied the accusation calling it "completely untrue."

The White House's flat denial has become a bit more complicated as we learn today that Lauria's accusation has been corroborated by two other creditors who were in the meeting with Obama administration officials. The Business Insider has details and they are pretty shocking:

Creditors to Chrysler describe negotiations with the company and the Obama administration as "a farce," saying the administration was bent on forcing their hands using hardball tactics and threats.

Conversations with administration officials left them expecting that they would be politically targeted, two participants in the negotiations said.

Although the focus has so been on allegations that the White House threatened Perella Weinberg, sources familiar with the matter say that other firms felt they were threatened as well. None of the sources would agree to speak except on the condition of anonymity, citing fear of political repercussions.

The sources, who represent creditors to Chrysler, say they were taken aback by the hardball tactics that the Obama administration employed to cajole them into acquiescing to plans to restructure Chrysler. One person described the administration as the most shocking "end justifies the means" group they have ever encountered.