YRC,Teamsters,Golddman Sachs Stave Off Bankruptcy

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bloomberg.com/apps/news?pid=20601087&sid=akW2fq12ZKOA

HAPPY NEW YEARS!!!

“Goldman Sachs Group Inc. helped YRC Worldwide Inc. complete a debt swap to avert bankruptcy after the Teamsters union said the bank was trying to profit from a failure of the largest U.S. trucker by sales.”

"YRC extended the deadline for the bond exchange six times in December as it sought to overcome resistance from bondholders owning derivatives that would pay out if the company defaulted. YRC, which has posted $1.7 billion in losses in the past five quarters, needed to complete the exchange by Dec. 31 to avoid a bank payment that would have left the trucker in an “unsustainable” position, the Overland Park, Kansas-based company said in a regulatory filing two weeks ago.

International Brotherhood of Teamsters President James Hoffa said in letters last month to regulators and lawmakers that Goldman Sachs and Deutsche Bank were among banks that “have a history of making markets in these types of derivative financial products"

"The **most difficult bondholders to deal with were investors with credit-default swaps that paid off if the company went bankrupt,” **Zollars, 62, said in a telephone interview. “It doesn’t seem right that individual investors would make money against companies surviving, particularly in this economy.”

"No so-called less-than-truckload company – one that hauls goods for more than one customer in the same trailer – has survived bankruptcy in the last 30 years, according to the Teamsters, the union that says it represents about 30,000 YRC employees.

"**Labor ‘Breakthrough’ **

The “risk of public rebuke,” along with “even more legislative threats” to the market for credit-default swaps resulting from the bankruptcy of a large employer of organized labor, helped the exchange pass, CreditSights Inc. analyst Sam Goodyear in New York wrote in a report yesterday.

Hoffa said the YRC debt exchange marked “our first time doing a campaign like this where we really had to get into high finance.”

“It**’s a new breakthrough for labor unions working on Wall Street to make something happen,” Hoffa said yesterday. “It’s very positive for a major company.” **

Six bankruptcy deadlines in one month…and a whole lot of praying…I’m gonna rest good this weekend…finally…Thank God.until the next deadline…
 
If you would google search all stories relating this for more than a year now you will see how the Teamsters worked side by side with YRC who employs about 40,000 people. And we got so far and almost had the rug pulled out from us by these Wallstreet default swaps. Justice is done for now. What an exhausting year for 40,000 families. Way to go YRC,New Penn, Holland, Reddaway, Teamsters, and Goldman sach’sand all financial institutions who helped…thank you …We know it’s not over but this has been a huge yearlong Battle. I Thank God we’re over this hump.For Now. Our competitors engaged in price wars and alot of people were banking on our demise. Thanks God for the help!!!
 
I find it abohorent that some shareholders would find it more preferable for a business to go under so they can make more money than if it stayed afloat. That’s what’s wrong with the entire system if things like this are allowed to happen. It sounds like alot of people made a lot of phone calls to these shareholders so they wouldn’t try to cash in their derivatives. They were putting the profit motive above people’s jobs and well being and even that of the company’s well-being. And people tell us there’s nothing wrong.

ChadS
 
I’m not very knowledgeable on all the details. But There are foreign investors involved in this stuff. And sometimes it’s good and sometimes it’s bad…but I find it unsettling that foreign investors can play such a role in our domestic legislations and such… It’s like our laws are for sale to the highest bidder…Or the bodholders,which may have involved foreign investors could play a decisive role on wether our 40,000 Teamsters could still affect domestic legoislations…If we would have gone down, because of the decisions of people not of our own country it could affect the laws of trucking because the teamsters actually look out for american workers. And without us it leaves legislation only in the hands of business which could be the good,not of Americans, but foreign investors…
The way Wallstreet has been given power is very frightening if we should care about our country. For business lobbies for legiislations,of course. As do the unions. The difference is, the union members actually live here. The corporations are owned by people who are not all Americans and don’t always have Americans best interests for their nation at heart when they lobby. I am grateful to the Wallstreet powers who helped, but don’t know if they would of, had not the Teamsters threatened public exposure.
The unions actually look out for americans who actually live here. Should we fall I fear the next step towards this deregulatory behavior is bringing Mexican drivers up here and we cannot compete with Mexican payrates. American land and homes are not the same price as Mexican ones…This race to the lowest price is destroying us,IMO.

time.com/time/world/article/0,8599,1887494,00.html
 
counterpunch.org/andrew01082010.html

"*Hedge fund entrepreneur David Einhorn, who denounced the malign practice at an investors’ conference earlier this year, claims that “basis packaging” has already been a major contributor to the bankruptcy of companies such as Abitibi-Bowater, General Growth Properties, Six Flags and even General Motors. Deriding calls for regulation of the CDS business, he declared that “trying to make safer CDS is like trying to make safer asbestos. How many real businesses have to fail before policy makers decide to simply ban them?”

Waiting for policy-makers to do the right thing will take a while. Credible reports indicate that Rahm Emanuel is counting on Wall Street cash to get the Democrats through the 2010 election. But fortunately the YRCW workers had the backing of their union, the Teamsters.

With strategic (name removed by moderator)ut from Greenberger, the Teamsters were able to identify whom they were up against. “We picked up intelligence that Goldman (Sachs) was making markets (in CDS) and then we got some direct evidence,” Teamster spokesman Ian Gold tells me. But Goldman was not alone. “All of Wall Street” was trying to bring the company down.

In response, the union made it clear that they were prepared to name names. “We would make it our mission to hold people accountable,” says Gold. Following advice from Greenberger on strategy, Teamster President James Hoffa wrote to relevant Senators, Congressmen, State Attorneys General and regulators detailing how “Certain financial firms, have been or are marketing and/or underwriting a strategy where bonds in YRCW would be bought by investors with the intent of voting against the exchange, thereby triggering a bankruptcy that would pay the investors and possible other financial firms huge profits from the high CDS payments which would be triggered by a YRCW bankruptcy or liquidation. The profit from the YRCW CDSs would far outweigh losses from the failed YRCW bonds.”

Widely reviled as “the vampire squid” of the financial world, Goldman proved unwilling to be charged with throwing 30,000 truckers out of work. The bank not only caved, but offered its help. “As well it should have,” notes Greenberger. In a sudden turnabout, the company began cooperating in an effort to recruit bondholders who would do the right thing and vote for the restructuring. Even so, time was running out. YRCW was forced to postpone the crucial vote on the structuring no less than six times. By December 30, Brigade Capital, a $5 billion New York hedge fund, was the last major holdout. Only when the Teamsters prepared to picket Brigade’s Park Avenue offices did the fund fold.

Just this once, a powerful union stopped the casino operators in their tracks. Meanwhile, too many other workers are left simply to fulfill their role as chips on the tables.
*"
 
Even the hardnosed stubborn Chicago Teamsters accepted the concessions now. We do not exist to sink companies. They all gave us a heart-attack between Nov. and december but have finally accepted the concessions. Way to go Chicago!.
 
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