From PowerLine blog:
One senses that the government is not exactly operating as an impartial arbiter of the interests at stake in Chrysyler's restructuring. The Journal reports that one assumption upsetting to some lenders was that Chrysler would pay about $3 billion total to a UAW retiree health-care fund in 2009 and 2010, which is owed about $10 billion and would also get an unknown amount of equity in the new Chrysler even though the fund is behind the banks, Cerberus, Daimler and the U.S. in the order to be paid.
Toward the end of the hard copy of the article in the Journal yesterday comes a memorable paragraph that I don't see in the article's online version:
Many of the lenders were angered by the demands made by the head of the administration's auto team, Steven Rattner, who wanted the banks to forgive $5.8 billion of the $6.9 billion owed them in exchange for nothing.
... The article then quotes one of the bank participants in the negotiations: "What the government was asking for was completely without precedent in the history of bankruptcy in the United States. Our reaction to their proposal was, 'Forget it.'"