Shortly after receiving its second bailout of the month (first Chrysler, then GMAC), Cerberus Capital Management announced that it is limiting investor redemptions. Finalternatives reports that Cerberus recently notified investors that gate provisions on its Cerberus Partners hedge fund were triggered after clients sought to withdraw more than 16.5% of the fund’s assets. Investors will be allowed to withdraw one-fifth of their year-end redemptions, and Cerberus is magnanimously waiving 60 percent of its incentive fee for one year after it recoups losses. Cerberus lost over 18 percent in October and November alone, and its Chrysler investment is likely a total loss. “This is a very hard decision for us, and the realization that taking these steps is now necessary is deeply disappointing,” says Cerberus top dog Stephen Feinberg.
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I guess Stephen Feinberg was consulted by Madoff recently.
Sounds like Cerberus will be the next Ponzi scheme.
Didn’t Cerberus recently make an attempt to get their money back from Daimler, claiming that they hadn’t revealed the depths of Chrysler’s problems before the purchase?
Tin foil hats on boys. It seems GMAC and The Fed conspired against bondholders.
According to Seeking Alpha, The Fed knew GMAC couldn’t swap the requisite amount of debt for equity to become a bank, and decided to let it become a bank anyway– before the deadline for the swap. And here’s the evil bit: they kept the decision under wraps until the eleventh hour.
In other words, the GMAC bondholders who swapped debt for equity under pressure of GMAC’s bankruptcy were “tricked” into doing so. The bondholders who knew what was coming got a better deal than the ones who caved.
And it’s still not clear– we STILL don’t know– whether or not GMAC qualified under existing rules (not emergency ones) to become a bank.
What does this have to do with cars? Not much. But it’s clear to me that the people who own Chrysler, Chrysler Financial and a newly-diminished share of GMAC (responsible for the health and well-being of GM) are a bunch of lying, thieving, string-pulling bastards.
And now that the U.S. Treasury is “loaning” them $6b, it’s the U.S. taxpayer who’s getting the shitty end of the lollipop. There’s no doubt in my mind that this is only the beginning of the government’s intervention in the domestic auto biz, even as it marks the end of Cerberus’.
@ RF
As Keith Olbermann might say “Today we call it a bailout, tomorrow we call it ‘Why Daddy went to jail\'”.