How Obama stole from the American taxpayer to buy votes from the UAW

Discussion in 'Politics & Religion' started by jficquette, Jun 14, 2012.

  1. >>First, GM and Chrysler owed billions of dollars to the union's Voluntary Employee Beneficiary Association (VEBA) when they went bankrupt. The union and the auto makers created VEBA in 2007 to assume responsibility for the UAW's generous retiree health benefits. The benefits allowed UAW members to retire in their mid-50s with minimal out-of-pocket health-care expenses for the rest of their lives. GM owed $20.6 billion and Chrysler owed $8 billion to VEBA as unsecured claims.

    A bedrock principle of bankruptcy law is that creditors with similar claims priority receive equal treatment. If you owe $1,000 each on two credit cards, in bankruptcy you cannot choose to pay $900 to Citi and only $200 to Chase. Each of the creditors is entitled to an equal percentage recovery.

    In the auto bankruptcies, however, the administration gave the unsecured claims of VEBA much higher priority than those of other unsecured creditors, such as suppliers and unsecured bondholders.<<