Supreme Court Stalls Chrysler-Fiat Deal
The Washington Post
The Supreme Court ruled moments ago that Chrysler cannot yet sell most of its assets to Fiat, a move that has been opposed by three Indiana state pension and construction funds.
The ruling grants a stay in the sale as the court gathers more data. The court has not decided whether to schedule a hearing on the matter.
It temporarily blocks the way for Chrysler to complete its merger with the Italian automaker and begin its new, post-bankruptcy life.
The U.S. favors the Chrysler-Fiat merger and wants to remove the Indiana road block.
“I’m delighted it appears we will be getting our day in court,” Indiana state treasurer Richard Mourdock said in an interview on CNBC.
Here’s the text of the statement from Associate Justice Ruth Bader Ginsburg:
“UPON CONSIDERATION of the application of counsel for the applicants, and the responses filed thereto,
IT IS ORDERED that the orders of the Bankruptcy Court for the Southern District of New York, case No. 09-50002, dated May 31 and June 1, 2009, are stayed pending further order of the undersigned or of the Court.”
Bankruptcy Attorney Thomas Lauria Reviews The Chrysler/Fiat Case
From the lawyer, Thomas Lauria, who is challenging the Chrysler deal. From an interview with Susie Gharib, Bankruptcy Attorney Thomas Lauria Reviews The Chrysler/Fiat Case
………………”GHARIB: I’m fine, thank you. Let me begin by asking you that if you do make an argument before the Supreme Court, what’s the case that you’re going to make on behalf of your Indiana investors?
LAURIA: Well, there are really two issues. The first one is that the executive branch of the government has no statutory or constitutional authority to take over and run a car company as it’s done with Chrysler. The second argument is that the scheme that the government put together with the company and some of the other stakeholders is really a sham transaction that was designed to upend the priority scheme under the bankruptcy code and to deprive my clients of their contractual rights.
GHARIB: So you’re saying on the first point, you’re saying that the government didn’t even have a right to give those bailout funds to Chrysler. That’s number one. Number two is, what’s the take away money or restructuring part of the deal, right?
LAURIA: Correct.
GHARIB: All right. So then what’s the end game here? What do you want to happen?
LAURIA: Well, we want to see Chrysler be reorganized in a way that complies with the law. I think it’s actually pretty easy to do. Rather than try to characterize this as a liquidation of Chrysler for $2 billion which gets paid to the secured lenders and then giving the $20 billion going concern value of the company to junior creditors, what you should do is sell the assets for the full price, $22 billion and then let the creditors share that $22 billion which is cash, debt and equity according to their contractual rights and the priority under the bankruptcy code.
GHARIB: But time is running out here and if the deal between Chrysler and Fiat doesn’t go through and Chrysler is forced to just liquidate, my understanding is that the value of the company, the break up value of Chrysler is under a billion dollars.
LAURIA: Well in fact there’s no competent evidence in the record what the liquidation value of Chrysler is. The expert who testified in front of the bankruptcy court below left out critical assets from his valuation analysis. He used multiples that were well under market and most interesting to me, he was going to get a $10 million success fee if the deal went through which really raises a question as to whether or not his testimony was biased.
Wild Thing’s comment…….
Obama and his Administration work for the people — not the other way around. I hope OBama feels a punch from this, even a liittle punch would be better then the constant caving in to his demands like we have seen too much of.
Solicitor General Kagan argued that the Supreme Court didn’t have authority to rule on this case. I wouldn’t be surprised that the USSC took the case just to rule that they do have authority over it no matter which way they rule.
Dear God, preserve our Republic.
There are already many precedents set by the court confirming what Ginsberg has said. According to Judge Andrew Napolitano, the Supreme has all the power to do exactly what they are going to do and should.
According to the Judge, all 9 Jusices have a portion of the country, when something like this comes along, That Justice puts the case on hold and notifies the other justices about the case. They will meet and decide which way this should go.
Kagan is an obama hack. This is what obama is talking about in the Constitution that he doesn’t like, the People have too many rights. Well, duh !, berry that’s what it is for to protect the ‘We the People’. If this turns out the way the judge is predicting, it will knock obama down a couple of pegs.
The Judge, believes the SCOTUS will rule against obama. The government has re-written the contract without one of the consenting parties. The most important party, the Secured Lenders. Who as it stands NOW only get 29 cents on a dollar, so all retiree’s invested with these secured lenders will get screwed if Obama is allowed to proceed with this scam. The Government has written the UNION into the contract without even asking the Secured Lenders, they have no business doing. So if the Chyrsler deal goes down the GM deal may be doomed as well.
ha, you gave Obama a black eye… very clever.
It is nice to see someone do their jobs and take the time to think rather than reacting for a change.
In four short months America has gone from a constitutional republic to a dictatorship. Obama and his thugs have overruled The Constitution. To them the rule of law, the separation of powers, contractual agreements and the Free Market are only to be followed when it suits their purpose. Otherwise their “greatness” usurps all that messy democracy stuff.
Here is some bad news. A Bankruptcy Judge just gave Chrysler permission to close 789 Dealerships. More jobs just met the ‘Turk’.
Mark, this is so horrible what is happening.
Chris R. haha thnak you.
Tom, well said they really are doing
that.
Mark oh noooo that is terrible.