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June 10, 2009
U.S. Supreme Court Rejects Creditors’ Objections ~ Fiat To Buy Chrysler Assets Today
High court won't block Chrysler sale
The Supreme Court has cleared the way for Chrysler's sale to Fiat, turning down a last-ditch bid by opponents of the deal.
The court said late Tuesday it had rejected a plea to block the sale of most of Chrysler's assets to the Italian automaker. Chrysler, Fiat and the Obama administration had warned that the high court's intervention could have scuttled the sale.
A federal appeals court in New York had earlier approved the sale, but gave opponents until Monday afternoon to try to get the Supreme Court to intervene.
Justice Ruth Bader Ginsburg ordered a temporary delay just before a 4 p.m. deadline on Monday.
Now the court has freed the automakers to complete their deal.
NEW YORK (AP)—Chrysler returned to bankruptcy court Tuesday to get a judge to approve the termination of 789 dealer franchises, while its plan to partner with Italy's Fiat hung in limbo as the automaker awaited action by the nation's highest court.
The sale of Chrysler's assets to Fiat Group SpA had been expected to close more than a week ago, but Supreme Court Justice Ruth Bader Ginsburg's decision to delay the sale now threatens to derail Chrysler's restructuring plans.
In a brief filed with the Supreme Court Tuesday afternoon, Chrysler and Fiat warned that the deal will terminate if it does not close by June 15. While a new agreement could be negotiated, there's no guarantee that one will be reached or that Chrysler will be able to be jump start its operations after the deadline, they said.
In bankruptcy court, more than 25 attorneys representing hundreds of dealers from across the country argued that little would be gained by terminating their franchises, while Chrysler maintained that the move is a necessary part of its plan to cut costs and quickly emerge from Chapter 11.
Arguments ended early Tuesday afternoon and U.S. Judge Arthur Gonzalez said he would issue his ruling later in the day.
Many of the dealers were selling the last cars on their lots and preparing to shut their doors for good at the end of the day, while others planned to sell used cars or other brands after severing ties with Chrysler.
The Auburn Hills, Mich., automaker has been flying through five weeks of bankruptcy proceedings and appeared all but certain to complete the sale of its assets to Fiat before the June 15 deadline. But Ginsburg issued a stay Monday to review an appeal by a trio of Indiana pension and construction funds which own a small part of Chrysler's secured debt.
The delay may be only temporary. Ginsburg could decide on her own whether to end the stay, or she could ask the full court to decide.
Fiat has the right to walk away from Chrysler after June 15 and leave the struggling U.S. automaker with little option but to liquidate. But a Fiat spokesman said Tuesday that the Italian automaker will not turn its back on a deal despite the Supreme Court stay.
Indiana officials, representing the state funds challenging the Chrysler sale, submitted a short statement to the Supreme Court Tuesday that calls attention to Fiat's statement.
"The Indiana Pensioners respectfully submit that the risk of termination by Fiat if the transaction does not close by June 15 no longer provides a basis for driving the timing of these proceedings," the officials said.
Responding to the Indiana funds later Tuesday, Chrysler and Fiat said that the sale agreement will terminate automatically if the sale doesn't close by the deadline, and there's no guarantee that they could negotiate a new deal.
"Given Chrysler's precipitous state, every day past June 15 increases the risk that Chrysler's business will not be able to restart successfully," the company said.
Meanwhile, the Obama administration said in a separate filing that each day of delay consumes more of the financing provided by the government.
"If the closing is delayed by more than approximately 10 days, a sufficient amount of the current commitment of debtor-in-possession financing from the United States will have been consumed as to require the government either to increase its overall funding to the detriment of taxpayers, or abandon its role in the transaction," the administration said.
Production at Chrysler's manufacturing plants remains halted pending the closing of the sale. Chrysler, which says it is losing $100 million every day its plants are closed, said it had no comment until it receives further information from the court.
Chrysler's ability to speed through the bankruptcy process has partially been a result of the involvement of the Obama administration's auto task force, which provided $4.5 billion in financing and helped negotiate a deal between the company's stakeholders.
Under a deal brokered in the days leading up to Chrysler's April 30 Chapter 11 filing, Fiat will receive up to a 35 percent stake in the new company created by the sale, in exchange for sharing the technology Chrysler needs to create smaller, more fuel-efficient vehicles.
The United Auto Workers will get a 55 percent stake that will be used to fund its retiree health care obligations, while the U.S. and Canadian governments will receive a combined 10 percent stake.
Meanwhile, the automaker's secured debtholders would get $2 billion in cash, or about 29 cents on the dollar, for their combined $6.9 billion in debt. Some of the debtholders balked at the deal, saying as secured lenders they deserved more.
The Indiana funds filed an objection to the sale and later appealed to the 2nd U.S. Circuit Court of Appeals and the Supreme Court. They claim the sale unfairly favors Chrysler's unsecured stakeholders such as the union ahead of secured debtholders like themselves.
The funds also are challenging the constitutionality of the Treasury Department's use of money from the Troubled Asset Relief Program to supply Chrysler's bankruptcy protection financing. They say the government did so without congressional authority.
The funds hold about $42.5 million, or less than 1 percent, of Chrysler's $6.9 billion in secured debt. They bought it in July 2008 for 43 cents on the dollar.
The appeals come as Congress scrutinizes the Obama administration's restructuring of Chrysler and GM. The Senate Banking Committee said it planned to call Ron Bloom, a senior adviser to the auto task force, and Edward Montgomery, who serves as the Obama administration's director of recovery for auto communities and workers, to a hearing Wednesday.
Fiat Said to Buy Chrysler Assets Today to Form New Automaker
A group led by Fiat SpA will complete its purchase of most Chrysler LLC assets this morning New York time, after the U.S. Supreme Court rejected creditors’ objections and cleared the way for a new U.S. automaker, said two people familiar with the matter.
The new company, Chrysler Group LLC, will be owned 20 percent by Turin, Italy-based Fiat, 9.85 percent by the U.S., 2.46 percent by Canada and 67.69 percent by a United Auto Workers union retiree health care trust fund. The U.S. and Canadian governments financed the sale with $2 billion.
Obama back in March laughing at the troubles the auto industry was having. A man whose claim to fame was that of a community organizer laughing at people that work darn hard for a living and hold very responsible jobs. Obama has ice in his veins. ~ Wild Thing
Wild Thing's comment.......
"Many of the dealers were selling the last cars on their lots and preparing to shut their doors for good at the end of the day, while others planned to sell used cars or other brands after severing ties with Chrysler."
On my way home yesterday, I heard on the news that the dealers trying to sell of their cars said that the only cars most of them had left were the stupid enviro cars, the ones that were supposed to have better gas mileage. People did not want them. Hello Obama you might want to listen for a change to what the people want, they DON'T want the tiny little toy cars or any of the Al Gore BS hype cars.
This whole mess will have an incredibly negative impact on business in America and it is ALL on Obama! There is no law but the Law of Obama, you will bow down before him and obey. He will rule by decree and will be righteous unto those who have paid tribute unto him. All hail OBAMA.
Well, there goes the republic. Done. Finis. Stick a fork in it. We now live in a fascist dictatorship. If I am wrong I as always I am open for learning more. But as of this writing for this post this is how it feels, this is how I see it.
This is truly a bad day for us. Unbelievable that these people are so willing to toss aside our great Constitution.
FDR’s Fascism took years to shut down. Finally the Democrats in Congress walked away.
The secured bonds are longer secured at least not when Obama can put unsecured creditors ahead of them.
This sends a bad message to foreign holders of bonds as well..
Way to go you muslim piece of filth.
We have 2010 and our fight back better be a good one. God help us and our country.
Rant over....haha sorry.
Posted by Wild Thing at June 10, 2009 05:55 AM
Comments
Well so much for the Supreme Court saving the country. Obama has a clear shot at the rest of us. On Fox last nite, Meghan Kelly nailed it she said, ' the court won't touch this'.
This is unbelievable, they just gave obama a green light to Socialism.
Posted by: Mark at June 10, 2009 07:23 AM
First up. The picture says it all. To me, the obambozo always came across like Benito Mussolini. I wonder which leftist dictator is the contingency plan?
One of our fairly large Chrysler Dealers shut down yesterday. This is in Wichita. We are the major center for a large part of Kansas and Northern Oklahoma. But they also got one in Wellington, which is a division point on the BNSF Railway. I admit that the logic does escape me, but I am not a business man. But I do know that I will no longer consider purchasing a Chrysler or a GM for that matter. And I have a Chrysler and a Chevy in the garage/driveway.
Posted by: Glenn Cassel AMH1(AW) USN RET at June 10, 2009 07:38 AM
We are fast turning into a fascist state and congress along with the judiciary stand idly by with their heads up their butts. Jon Voight had a good little speech the other night on the false prophet Obama. I have posted it along with two other clips.
Bob A.
Posted by: Bob A at June 10, 2009 08:43 AM
Chrissie, I borrowed your Obamoussolini pic for my blotspot.
What a fascist POS this POS is. He must to go prison. How cool if we could impeach him and inter him at GITMO!
Posted by: Billy Ray at June 10, 2009 10:55 AM
We knew all along that Ruth Bader Ginsburg at SCOTUS was going to support Fascism, she was the chief litigator of the ACLU's women's rights project. Thinking otherwise is self deception.
Self deception isn't one of my strong suits, when you are up to your ankles in shit, head first, I can't call that a bed of roses.
An Obama appointed Sotomayor will be the nails in our coffins. Appointed to dismantle the Constitution.
Just look at the RINO's lining up to support the Communists, like they have for 65 years, the last 18 years have been under the leadership of Bernie Sanders and the CPC , from which Nancy Pelosi was spawned.
Have any of the members of Congress objected to outright Communists amongst them selves? Ада нет!!!
The only noises from the Senate GOP have come from those who have their heads on the chopping block in 2010, they are being visible to protect their incumbencies, nothing more. All 435 seats in the House of Representatives aka Congress are up for re-election and 1/3 of the 100 in the Senate, i.e. 34 Senators are in Class III for 2010. You can bet the opposition is already working to solidify the goals of their CPUSA agenda. Stalin would be proud of our 'Americans". What are the Republicans doing? Supporting Obama?
Well we can't have Pawlenty, or Jindal or Palin, they don't have that Rockefeller gravitas, or the NE bluenoser pinache, all are threats to the RINO establishment. Just look at how 'hinky' Newt Gingrich was at the GOP fundraiser, protecting his turf, Palin stole his thunder. She's a conservative, he's a globalist RINO, Palin is a direct threat to his running in 2012. Still see any reasons to support any incumbent????
Posted by: Jack at June 10, 2009 10:55 AM
So much for contractual agreements and guarantees in Federal law now. Any promise can be nullified. The voting bloc is what counts, in this case the unions.
So much for balance of power as Congress and SCOTUS seem to have rolled over for our very own rendition of Robert Mugambe.
So much for The Constitution. The life blood of the Republic of America is basically dead.
So much for an economy driven by business and consumerism. We are now a government spending economy.
Each day of the Obama administration proves to be a sadder day for traditional America as we sink deeper into the globalization of socialism. This New World Order sucks.
Posted by: TomR at June 10, 2009 11:30 AM
Of course the court won't touch it. Bad thing is I have a Chrysler product for a car. I guess next time around, I'll buy a Ford. At least it's still American. I'm going to try and instill that in my kids too--buy American. Fiat is a horrible car company. I had a friend who had one and it was ALWAYS in the shop!
Posted by: Lynn at June 10, 2009 11:41 AM
Actually Fiat is a third party. Obama, the UAW, and Fiat and in that order. So much for outsourcing and jobs going overseas. The secured creditors have just gotten the shaft from uncontrollable Executive Branch. The SCOTUS has been corrupted to the point the Executive branch is calling all the shots.
With obama and the UNION running Chrysler Fiat will have little to say about what happens. The State Run Media is trying to sell the idea that Fiat has bought Chrysler, they are a minor third party. They are the bottom thrid of a very unbalanced triangle.
Posted by: Mark at June 10, 2009 03:31 PM
It appears to me that the SCOTUS is scared to death of theis SOB. They don't check his eligibility to serve as President, they won't enforce contract law, they won't enforce property rights and they let him close dealerships based on political cronyism.
The family of the lady host on "Fox and Friends" just had their GM dealership ordered closed at the begining of the week after eighty years of operations and dispite growth of 3% last year. Growth LAST year! They should have been taking over some of the weak sisters in the GM dealerships not being closed! Such is life in a socialist dictatorship.
This week your freedom account should have $220 for political contribution next year.
(Ten dollars per every week since Obama took office.)
Posted by: Avitar at June 10, 2009 04:26 PM
I agree Glenn, they're on my blacklist too. From what my wife was telling me, there are a whole lot of people thinking the same thing. The bad part is, now Ford has to compete with companies subsidized by public money. This is totally un-american. I just finished Mark Levin's book Liberty and Tyranny. I see why it's #1 at Amazon. I highly recommend it.
This is such a shame, I really liked the new Challenger.
Posted by: jim at June 10, 2009 04:32 PM
It appears to me that the SCOTUS is scared to death of this SOB. They don't check his eligibility to serve as President, they won't enforce contract law, they won't enforce property rights and they let him close dealerships based on political cronyism. Either George Bush gave himself unnecessary headaches observing the law because the SCOTUS will not or the SCOTUS expect to death if they defy this President.
The family of the lady host on "Fox and Friends" just had their GM dealership ordered closed this week after eighty years of operations and despite growth of 3% last year. Growth LAST year! They should have been taking over some of the weak sisters in the GM dealerships not being closed! Such is life in a socialist dictatorship.
This week your freedom account should have $220 for political contribution next year.
(Ten dollars per every week since Obama took office.)
Posted by: Avitar at June 10, 2009 04:34 PM
Mark, thanks for that from Meghan Kelly,
she is so good and she did nail it in saying
that.
Posted by: Wild Thing at June 10, 2009 07:32 PM
Glenn Cassel AMH1(AW) USN RET, I have a
Grand Jeep Cherokee, and I got it when
Chrysler was Chrysler -Dalhmar( spelling).
Right after I paid off my car Dalhmar left
Chrysler. I would guess they saw what Obama
was like and the problems Chrysler was
having and left ahead of time.
Posted by: Wild Thing at June 10, 2009 07:36 PM
Bob A., yes his speech was wondeful.
Posted by: Wild Thing at June 10, 2009 07:38 PM
Billy Ray, I am so glad.I found it online and
it was just so perfect, I am so glad you
put it at your blog too.
Posted by: Wild Thing at June 10, 2009 07:40 PM
Jack, the only ones I have heard and seen
speaking out about all of this constantly
has been John Boehner, Mike Pence
and also Jim Demint. I get their videos
and updates in emails.
Your right about all you said, I kept
hoping with my heart but my head said
otherwise they are just as you said.
Ginsberg is that through and through.
Posted by: Wild Thing at June 10, 2009 07:44 PM
Tom, it sure does!!!
"This New World Order sucks."
"The Constitution. The life blood of the Republic of America is basically dead." ....it really is the life blood, that is so true Tom.
Obama is at the wheel and driving us
at the speed of light into it.
Posted by: Wild Thing at June 10, 2009 07:49 PM
Lynn, me too, I have a Chrysler too.
I can't get a new car no way and this
one I love it so much.
I guess I better ride my bicycle more
to try and get my car to last longer.
augh
Posted by: Wild Thing at June 10, 2009 08:04 PM
Mark, thanks for the line up your right.
"Obama, the UAW, and Fiat and in that order"
He must be oh so proud of himself tonight
for another horrible win under his burka.
Heck let's put him in a burka might as well.
Posted by: Wild Thing at June 10, 2009 08:06 PM
Avitar, I think your right, they have
been behaving not in strength that
they have but in some kind of fear
of Obama.
Thanks for the info about the dealership too
that goes right along with that post I did
about them closing republican donors
dealerships. That person may not have
donated to a republican politican but
they did something to get on Obama's hit
list.
Posted by: Wild Thing at June 10, 2009 08:13 PM
Jim, his book is so good. I agree, I am
so glad it is doing so well.
Posted by: Wild Thing at June 10, 2009 08:16 PM
