The NYT discussed President Obama's feud with several hedge funds who refused to agree to the same write-down terms as other major bond holders. While the article points out that the hedge funds had purchased the debt for around 30 cents on the dollar, it would have also been useful to point out why the debt was selling for 30 cents on the dollar.
Other investors assessed both Chrysler's economic situation and the politics around the bailout and concluded that they were unlikely to get more than 30 cents on the dollar. The hedge funds that refused to accept the deal offered by the Obama administration were speculating that they could pressure the Obama administration into giving them a better deal. That is why they were prepared to pay more for this debt than other investors.
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