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May 22, 2009The Honorable Timothy Geithner SecretaryUnited States Department of Treasury1500 Pennsylvania Avenue, NWRoom 3330Washington, DC 20220Dear Mr. Secretary:We all agree it is a national tragedy that our car makers find themselves either in bankruptcy or on theverge of it. However, it is exceeded by the greater tragedy of hundreds of millions of taxpayers beingsaddled with unprecedented debt to bail them out.Many of us did not agree with efforts to reward these failed institutions with taxpayer assistance. Nowthat the federal government has saddled our constituents with this unprecedented action, spending anddebt attached to the bailout, we want to make sure that the money is distributed fairly and that the ruleof law is not undermined by any federal government action.We are extremely concerned that in the name of restructuring General Motors, the Presidential Task Force on the Auto Industry (Auto Task Force) has begun waging what some believe amounts to a war on capital: contractual rights of investors are being trampled by the government under the rationale of “extraordinary circumstances.” Investors in General Motors relied upon rules inherent in the U.S. bankruptcy code that define the rights of creditors in the event of a default or a bankruptcy filing. Thegovernment’s proposed reorganization of the company appears to subvert these rules to arrive at a politically motivated solution in the name of reviving the company.The proposal seems to favor the rights and claims of the UAW, a political ally of the currentadministration and a powerful lobbying force in Washington, over the rights and claims of thecompany’s diverse group of bondholders, who collectively hold $7 billion more in General Motorsdebt than the UAW’s health trust and are equal members of the creditor class. The proposal would1
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