In particular, the three parties acknowledged that the pending pension agreement would not “impact Tranche C recoveries” — technical language that shielded from adverse outcomes any corporation that loaned capital to Delphi during its bankruptcy.
“Tranche C” investments become far more valuable when companies come out of bankruptcy and resume normal accounting. A promise that their capital would not take a hit in Delphi’s final restructuring was particularly helpful to Silver Point Capital, a firm tied to then-Treasury official Matthew Feldman.
Silver Point Capital and Elliott Capital Management earned a combined $1.3 billion on the Delphi deal, according to the New York Post. Those profits came in late 2011 when Delphi emerged from bankruptcy and launched its initial public offering.
The document obtained by TheDC shows that Feldman had the “highly confidential” document before the details of the deal contained within it were publicly announced.
Feldman came to the Treasury Department from Willkie Farr & Gallagher, the law firm that represented Silver Point Capital as it angled for a cut of the bankrupt Delphi’s debt load. Feldman returned to the same law firm after leaving the Obama administration and remains there today. Silver Point is presently among his clients.
Harry Wilson, who worked on the bailout with Feldman at Treasury, was a partner at Silver Point before joining the administration. While Wilson’s name has shown up on other emails and documents related to the Delphi scandal, he was not a recipient of the email with the talking points attached.
A second email chain TheDC has obtained shows PBGC officials internally complaining about how “GM has refused to release the draft of the ‘PBGC Settlement’ to us.’”
“What a pleasure to negotiate with these folks,” PBGC’s John Menke added in the email, presumably with sarcasm.
PBGC’s Joseph House then forwarded that email to Treasury’s Feldman, commenting: “Seriously?”
“I’ll take care of it now,” Feldman responded.
A source close to congressional investigations into the Delphi pensions told TheDC that this email shows “Feldman clearly takes it upon himself to provide PBGC with the document.”
This second email chain came earlier in the afternoon of July 7, 2009 — the same day PBGC sent Feldman that internal talking points memo.