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No v. 21 (Bloomberg) — President-Elect Barack Obama’s transition team is exploring a swift, prepackaged bankruptcy for automakers as a possible solution to the industry’s financial crisis, according to a person familiar with the matter.

A representative of Obama’s team has already contacted at least one bankruptcy-law firm to say that Daniel Tarullo, a professor at Georgetown University’s law school who heads Obama’s economic policy working group, would call to discuss the workings of a so-called prepack, according to this person.

U.S. lawmakers yesterday delayed until December a vote on whether to give General Motors Corp., Ford Motor Co. and Chrysler LLC a $25 billion bailout. GM today said it would idle production at four plants an extra week and return some corporate jets to conserve cash. Automakers could use a judge-supervised bankruptcy to reduce debt and reject expensive contracts.

“It creates the environment to deal with GM’s problems but limits government financial commitment,” said bankruptcy lawyer Mark Bane of Ropes & Gray in New York.

Bankruptcy is just one option being examined. Obama told CBS News’s “60 Minutes” on Nov. 16 that government aid to automakers might come in the form of a “bridge loan,” advanced if the industry could draw up plan to make itself “sustainable.” The president-elect earlier urged Congress to approve as much as $50 billion to save automakers, using the model of Chrysler’s bailout in 1979.

Tarullo referred questions on a prepack to the transition team press office. Team spokeswoman Stephanie Cutter said, “We have not put out anything specific for the auto industry except that something needs to be done immediately.”

No Cash

GM, the largest U.S. automaker, said it might run out of cash as early as the end of the year and that the risk was even greater by mid-2009. GM Chief Executive Officer Rick Wagoner said this week GM would have to liquidate if it filed for bankruptcy.

The automaker probably has weeks rather than months left before it runs out of money unless it gets federal aid, Jerome York, an adviser to billionaire Kirk Kerkorian and a former GM board member, told Bloomberg Television yesterday.

In a prepackaged bankruptcy, an automaker would go into court with financing in hand after reaching agreement with lenders, workers and suppliers on what each would give up and on the business plan to be followed. The process might take six to 12 months, compared with two to five years if the automakers followed an ordinary Chapter 11 proceeding and worked out agreements under a judge’s supervision, Bane said.

Government Financing

Automakers would have to depend on government financing to restructure in bankruptcy court and probably couldn’t attract private loans until they were ready to emerge from the process, Bane said.

Officials of the three automakers told members of Congress this week that they had studied a pre-arranged bankruptcy, championed by Republican lawmakers such as Senator Bob Corker of Tennessee, before dismissing the idea as unworkable.

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WASHINGTON — Two young men who are believers in “white power” have been arrested and charged in Tennessee in what federal officials described as a plan to assassinate Senator Barack Obama and kill black children at a school.

Federal officials said they regarded the scheme as “serious.” It does not appear to have moved to an advanced stage, according to court documents unsealed Monday, but officials said the two men did acquire several rifles and cased a home and a gun store to rob as part of the plan.

Federal officials said that both of the men who were arrested — Paul Schlesselman, 18, of West Helena, Ark., and Daniel Cowart, 20, of Bells, Tenn. — told interrogators that they had talked of assassinating Mr. Obama. Lawyers for the men could not be reached.

The two men “planned to drive their vehicle as fast as they could toward Obama shooting at him from the windows,” according to an affidavit filed in federal court in Jackson, Tenn., by an agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives. Mr. Obama has no plans to be in Tennessee, and the affidavit does not make clear whether the men had picked a location for an attack.

The assassination was to be the culmination of a “killing spree” that would also single out children at an unnamed, predominately black school, federal officials said. The men talked of “killing 88 people and beheading 14 African-Americans,” according to the affidavit.

The two men each had “very strong views” about Aryan white power and “skinhead” ideology, the federal officials said, and the numbers 88 and 14 have special significance in the white power movement. The number 88 is shorthand for “Heil Hitler” — H is the eighth letter in the alphabet —and 14 signifies a 14-word mantra among white supremacists: “We must secure the existence of our people and a future for white children.”

Officials said the two men met via the Internet through a mutual friend.

Concerns about possible plots against Mr. Obama have been acute because of his status as the first black presidential nominee from a major party. He has had Secret Service protection since May 2007, the earliest a candidate was ever assigned protection.

Mr. Cowart and Mr. Schlesselman were each charged with illegal possession of a sawed-off shotgun, conspiracy to rob a firearms dealer and making threats against a presidential candidate. A detention hearing is scheduled for Thursday in Memphis.

“We honestly don’t know if they had the capability or the wherewithal to carry out the kind of plan that they talked about,” Malcolm Wiley, a spokesman for the Secret Service in Washington, said in an interview. “But we take any threat seriously not matter how big or how small it is.”

On the eve of the penultimate presidential debate, a new TIME/CNN poll shows John McCain still struggling in states won by George W. Bush in 2004, a sign that last week’s vice presidential debate had little effect on voter opinion.

In North Carolina, which Bush won by more than 12 percentage points in both 2000 and 2004, McCain and Obama are locked in a dead heat, with each candidate garnering the support of 49% of likely voters. In Indiana, which Bush won by 21 points in 2004 and 16 points in 2000, McCain maintains a slight 5 point lead over Obama, with 51% of likely voters, compared to Obama’s 46%.

In the crucial swing state of Ohio, which Bush won by slight margins in both 2000 and 2004, McCain trails Obama by 3 points, with the support of 47% of voters, compared to Obama’s 50%. Obama also holds a statistically significant 8 point lead over McCain in New Hampshire and a 5 point lead in Wisconsin, two states that Democrat John Kerry was able to win in 2004.

As a result of the new survey, CNN now considers New Hampshire and Wisconsin to be Obama-leaning states, after previously being considered tossups. North Carolina is now considered a tossup, after previously being categorized as a McCain-leaning state.

The polls were conducted between October 3 and 6, after last Thursday’s debate. They have a margin of error of +/- 3.5 to 4 percentage points.

Last week, the McCain campaign reacted to a polling downturn by shuttering its operation in the state of Michigan and redistributing staff to Pennsylvania, Wisconsin and Maine, where electoral votes are distributed by congressional district. In a conference call last week, Mike DuHaime, the McCain campaign’s political director, acknowledged that the national mood and Obama’s deep pockets had put previously solid Republican states like Indiana in play.

“I do think just the overall environment right now that we face is one of the worst environments for any Republican in probably 35 years,” DuHaime said. “Any time you have that, you have states move within that margin.”

After two grueling years, only two major events remain in the 2008 presidential campaign, a candidate town hall forum Tuesday in Tennessee, and a debate on October 15 in New York. In a nod to the dwindling window of opportunity, McCain again sharpened his attacks on Obama during a stump speech Monday in New Mexico, charging that Obama harbors a “back story” on every issue that needs to be explored.

“All people want to know is: What has this man ever actually accomplished in government? What does he plan for America?” McCain said. “In short: Who is the real Barack Obama? But ask such questions and all you get in response is another barrage of angry insults.”

Campaigning in North Carolina, Obama countered by charging that McCain and his aides were “gambling that they can distract you with smears rather than talk to you about substance.”

Source: TIME