Breaking: SCOTUS stops Chrysler sale
posted at 4:18 pm on June 8, 2009 by Ed Morrissey
Share on Facebook | regular view
The Supreme Court, in an order signed by Justice Ruth Bader Ginsburg, has stopped the sale of Chrysler to Fiat and the bankruptcy plan engineered by the White House. No details are available quite yet on the story, but I will be watching for updates on the wires and blogs.
Ginsburg stopping the sale, though … that’s interesting in and of itself.
Update: “Stayed pending further order,” Ginsburg noted. That could mean a temporary stay, but …
Chrysler has said a delay could scuttle the deal.
A federal appeals court in New York had earlier approved the sale, but gave opponents until 4 p.m. EDT Monday to try to get the Supreme Court to intervene.
Ginsburg issued her order just before 4 p.m., when Chrysler would have been free to complete the sale of most of its assets to Fiat.
She can ask the full court to decide whether to continue the stay or vacate it on her own, but if she was inclined towards the latter, she wouldn’t have issued the stay. And if Ginsburg has a problem with the government intervention here, just wait until Scalia and Thomas get a crack at it.
Update II: AFP reports on the decision:
The move will allow the justices to consider whether to allow a full hearing of the legal issues — a delay which Chrysler and US officials say could cause the plan to collapse.
A group of Indiana pension funds opposed to Chrysler’s sale to Fiat filed the emergency appeal with the Supreme Court to halt the sale.
The pension funds wanted a hearing on alleged violations to due process that damaged their standing in the bankruptcy. The appellate court didn’t want to allow it, but Ginsburg’s decision shows that those claims have enough merit to get heard.
Update III: Chrysler says they only have until June 15 to complete the sale to Fiat, and after that they’ll have to flat-out liquidate. Maybe they should have done better by their senior creditors then, huh? And guess who’s representing them? Thomas Lauria — the lawyer who blew the whistle on the Obama administration’s extortive tactics in the negotiations. You think he’s loving this today?
You must be logged in to post a comment.
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
Comment pages: « Previous 1 2 3
The Chicago way………….
Seven Percent Solution on June 8, 2009 at 7:36 PM
Breaking: Brian Deese has denied the stay.
econavenger on June 8, 2009 at 7:37 PM
Maybe they are beginning to realize that under Obama’s Socialism there will not be any need for them to interperate a constitution that has been rendered meaningless.
Franklyn on June 8, 2009 at 7:41 PM
My GOD there my be hope that the Const. still means some thing in this country.
thmcbb on June 8, 2009 at 7:43 PM
Somewhere near Chicago a horse just lost it’s head, which is in a box, on it’s way to DC. I wonder whose bed that will end up in tonight.
Yoop on June 8, 2009 at 7:53 PM
This stay is a tragedy, Ed. I thought the sale terms and UAW/federal control sounded Surprisingly good.
leftnomore on June 8, 2009 at 8:16 PM
One night, with help from Mr. Jack Daniels, I fell victim to Bishop’s subtle sarcasm….
Never again!
massrighty on June 8, 2009 at 8:23 PM
Forcing Chrysler to liquidate isn’t necessarily ideal for the Indiana pension funds. And their total exposure isn’t really all that huge.
What I wonder is if they have a larger exposure in GM bonds. If so, then making an example of Chrysler would serve them well in later more important negotiations relating to the GM reorganization.
Steven Den Beste on June 8, 2009 at 8:34 PM
Does anybody else get the feeling that this is what FDR had to deal with in the 30s? Every big program he got started ended up being thrown off the train by SCOTUS.
We know how this script ends and it’s
for us.
platypus on June 8, 2009 at 8:58 PM
Now that was an interesting malfunction of mouse click.
platypus on June 8, 2009 at 8:58 PM
Ha ha ha ha ha ha ha ha ha hahahahahaahahahahahahahahahhaha
hahahaahahahahahahahahahhahahahahaahahahahaha
hahahahhahahahahaahahahahahahahahahhahahahaha
ahahahahahahahahahhahahahahaahahahahahahahahah
hahahahahaahahahahahahahahahhahahahahaahahahah
ahahahahahhahahahahaahahahahahahahahahhahahahaha
ahahahahahahahahahhahahahahaahahahahahahahahahh
ahahahahaahahahahahahahahahhahahahahaahahahahah
ahahahahhahahahahaahahahahahahahahahhahahahahaa
hahahahahahahahahhahahahahaahahahahahahahahah
Whew!
Good one.
seanrobins on June 8, 2009 at 9:19 PM
Whoaaa! Is Obama’s ham-fisted radical regime even too “progressive” for Ruth Bader Ginsburg?
petefrt on June 8, 2009 at 9:53 PM
Holy Cow!
Congrats so far, Mr. Lauria. Keep fighting!
PattyJ on June 8, 2009 at 9:55 PM
You’re probably right.
I like your outrage! It’s fiesty and welcome. Just wanted you to know whom you are chastizing. Carry on!
JAM on June 8, 2009 at 10:04 PM
I think what the court saw and hopefully will put a stop to is the bait and switch the O hole tried to pull off here. First, you give the secured bondholders pennies on the dollar and claim the company is only worth that much. Then after that, you dump tons of taxpayer dollars in to boost up the value of the company and give the lions share of that to the unions who spent 200 mil to help the O hole get elected. This was blatantly against the law and I hope the high court sets it straight. If they do not, anyone would have to be crazy to invest in any American company again.
Bikerken on June 8, 2009 at 10:06 PM
That’s not the point. If you let the Obama administration walk in and negate the meaning of contracts this time, you open the door for government to make all contracts and private property rights meaningless.
Daggett on June 8, 2009 at 10:07 PM
One of Buzzy’s staff members told her that if Fiat took over then Buzzy would no longer be able to specify “fine Corinthian leather” as an option.
viking01 on June 8, 2009 at 10:43 PM
Steven Den Beste on June 8, 2009 at 8:34 PM
Maybe the Indiana pension lawyers think 50 cents on the dollar now is better than 10 cents on the dollar when the Administration/UAW have finished “managing” this process.
cs89 on June 8, 2009 at 10:48 PM
GINSBERG, YOU MAGNIFICENT BASTARD!
You’ve read the Constitution. Kick this bastard back to Kenya.
“The genius of those outdated concepts of old white guys who lived 200 years ago.” (Asswipe Bishop’s remarks)
Thank god they structured it the way they did.
luvstotango on June 8, 2009 at 11:16 PM
Ginsburg ordered the stay because the 2nd Circuit — which includes New York — is her Circuit so I wouldn’t read much into that fact. I think the Court will probably weigh in further in rather short order, i.e., whether to extend the stay and hear the case on its merits, or let the sale go forward. I won’t pop open the champagne bottle just yet, but I am sure hoping they decide to rule on this. Whoever said upthread that the justices will defend their own turf is certainly right. Maybe that’s what is driving this, who knows? Whatever it takes to preserve what little shreds are left of the Constitution, I am all for it. My good friend thinks this Court is way right wing (that opinion based almost solely on the outcome of Gore v. Bush, however), and while I may be biased, I find it to be one of the most fair and even-handed Courts we’ve had in at least a century. They don’t always get it right IMO (Kelo, anyone?) but I think ideologically they are pretty well-balanced. Let’s hope justice and fairness prevail here.
Wow, it’s been a pretty bad day for The One all around, hasn’t it? Could the bloom be off the rose already?
NoLeftTurn on June 9, 2009 at 12:02 AM
The judiciary is the only thing left to save the country right now. That is why they are there. If they hadn’t done this, it’d truly be over.
Except… what is Ginsberg’s game?
amkun on June 9, 2009 at 12:20 AM
Ruth Bader Ginsberg, you are a raving beauty and the woman of my dreams. I have always thought that you were a sex bomb. OK so keep making the right decisions to save out country and I will offer up my stud services and be your sex slave for life.
I care about my country that much. I will need a couple of six packs though and maybe a shot of some penicillin too.
Geochelone on June 9, 2009 at 2:10 AM
Can we talk?
`
I keep hearing that “Fiat can back out of the deal” if it isn’t done by June 15. True enough, it is part of the contract, BUT Fiat is getting a 20% equity stake and operational control for NOTHING. They aren’t putting up any cash at all!
`
Why the heck would they opt OUT of the deal just because it’s delayed a few weeks? It’s FREE stuff. They aren’t going anywhere.
`
Good luck to the Indiana pension funds, and a pox upon the bondholders who capitulated to Obama’s bullying.
`
Adjoran on June 9, 2009 at 4:57 AM
What’s really surprising is that these are downstate S.Senators, and NYC ones at that. (For those out of area, the five NYC boroughs are each coterminus with a NYS county, which means that the police have five different county/state court systems, plus the federal court system, to deal with.)
As far as Ginsberg and the Chrysler sale: I don’t think this has much to do with her personal beliefs. I think she’s bound by oath, honor, and collegiality to allow something to reach the full court if there’s a snowball’s chance in hell that they would rule in its favor. You can decide which is more important.
njcommuter on June 9, 2009 at 5:13 AM
Well … It’s very rare that one of the big three goes bankrupt – well, it used to be rare.
Justice Ginsburg handles emergency appeals from the 2nd Circuit – which is where this appeal for relief came from. I know very little of the exact procedures of the SCOTUS – but I’m assuming the other justices have “territory” they cover also. Since different justices cover different terrority – it could lead to some very subjective decisions on what gets reviewed and what doesn’t get reviewed – depending on where the emergency appeal is filed and who has jurisdiction over it … Unless …
The justices all agree that they will consult the rest of the justices when they get an appeal like this – and I suspect this is what Ginsburg may have done. Could be that Ginsburg is totally for the sale – but she could have spoken with the other justices who thought that the case should be reviewed.
So yeah – I think this is rare alright – but these are exception times.
Having said that – this structured settlement has got to be unconstitutional because the bond holders were considered LAST in line when they should have been first (by law).
There’s three applications for relief here …
**One from the Indiana Solicitor General on behalf of three state retirement funds – and his appeal is based on (1) The fact that the government unilaterally overrode the “first-lien” status of his clients and (2) That there was a misuse of TARP funds – which were appropriated by Congress to rescue banks but were used by the President to bail out the auto-makers.
**One from a coalition of consumer groups that argue that Chrysler will be off the hook for past liability in their products if the sale goes through. I’m not sure this complaint has a lot of octane in it – seems this would happen all the time in a bankruptcy – but I’m no legal expert.
**One from a former Chrysler employee who contracted mesothelioma – and the complaint there is that the sale would eliminate her claims to relief.
I’m thinking that really only the Indiana Solicitor’s complaint has a lot of water.
On the flip side – if the SCOTUS stops the sale – up to 38,000 people could be out of a job when the company is liquidated. Not to mention the UAW pensions that will go down the drain also. So there is some political pressure on the Justices here to go along with the government. If the SCOTUS stops the sale – and all hell breaks loose – they will be seen to be responsible for the loss of jobs and chaos. If they go along with the Executive – then any failings are squarely on them.
Depends on how big the SCOTUS Chajones are.
HondaV65 on June 9, 2009 at 8:20 AM
Yes, and hopefully there’ll be enough litigation by bondholders against their fund managers to make managers think twice before capitulating again. If not Chrysler, then surely GM. Bring on the hungry class action lawyers.
petefrt on June 9, 2009 at 8:26 AM
Great points.
Notice that EVERYTHING lately, from TARP to Porkulus, to now this (and next: Obamacare) is all rammed down our throats with the common theme of, “HURRY HURRY HURRY, DELAY WOULD MEAN DISASTER, NO TIME TO READ, PASS IT NOW!”?
Meaning, they HAVE to ram it through fast BEFORE anyone discovers the horde of devils in the details.
wildcat84 on June 9, 2009 at 8:51 AM
On the flip side – if the SCOTUS stops the sale – up to 38,000 people could be out of a job when the company is liquidated. Not to mention the UAW pensions that will go down the drain also. So there is some political pressure on the Justices here to go along with the government. If the SCOTUS stops the sale – and all hell breaks loose – they will be seen to be responsible for the loss of jobs and chaos. If they go along with the Executive – then any failings are squarely on them.
Depends on how big the SCOTUS Chajones are.
HondaV65 on June 9, 2009 at 8:20 AM
Rule of law is a bitch, ain’t it.
Sheerq on June 9, 2009 at 9:57 AM
On the flip side – if the SCOTUS stops the sale – up to 38,000 people could be out of a job when the company is liquidated. Not to mention the UAW pensions that will go down the drain also. So there is some political pressure on the Justices here to go along with the government. If the SCOTUS stops the sale – and all hell breaks loose – they will be seen to be responsible for the loss of jobs and chaos. If they go along with the Executive – then any failings are squarely on them.
Depends on how big the SCOTUS Chajones are.
HondaV65 on June 9, 2009 at 8:20 AM
Rule of law is a bitch, ain’t it?
Sheerq on June 9, 2009 at 10:08 AM
Regardless of the final ruling, whether pre-determined (ugh) or put into the fate of the SCOTUS (hopeful), this is a line in the sand that makes us pause and realize that contracts matter in our great nation.
I’m still coming to grips with this development – especially Ginsburg’s embracing – even though it is the way it’s supposed to work.
NumberTwo on June 9, 2009 at 10:16 AM
I expect the most the Supreme Court would do is tell Judge Gonzalez to uphold the rule that secured creditors, as a class, are to be satisfied before unsecured creditors.
Judge Gonzalez might do two things immediately–demand the pensions produce their alternate plan, which they’re supposed to have ready if they object to the debtor’s plan; and deny Chrysler the right to act as its own trustee.
Then they go to work to come up with some 60-month plan instead of Obama’s Summer of Automatic Stay.
All that may come of it is a plan whereby Fiat buys Chrysler, the UAW takes equity, and Obama floats a loan to Fiat-Chrysler-UAW and the extant secured creditors get 100% of their money from the taxpayer.
Chris_Balsz on June 9, 2009 at 10:16 AM
We can only hope so
Conservican on June 9, 2009 at 10:50 AM
The Indiana pensions will also no longer invest in any company that has received TARP money. Hmmmm, I wonder why?
darwin-t on June 9, 2009 at 11:17 AM
One rule I have is if a salesman say I have to decide right now, the answer is always no.
darwin-t on June 9, 2009 at 11:20 AM
If government intervention is so grandiose that even Justice Ginsburg thinks it’s over-the-top…Am I dreaming? Pinch me.
GinnyPublican on June 9, 2009 at 11:32 AM
Ginsberg gave time, only. But it was a bold decision and a good one.
AnninCA on June 9, 2009 at 11:50 AM
I never thought I’d live to see the day when conservatives would hail Ruth Buzzy Ginsberg for truly administering justice. Let’s not hold our breath for her to accidentally do it the next time.
kscheuller on June 9, 2009 at 12:05 PM
That very comment is irresponsible and downright ignorant obviously you don’t know the facts! Everything isn’t about race.
The truth about this administrations’ “Car Czar” and the strongarm Chicago political tactics are going to come out. Mr. Lauria promised that he would expose it several weeks ago. 3 supreme court justices are about to get up in the Obama Administration and show them how the constitution does matter!
TruthofFire on June 9, 2009 at 12:13 PM
Where was I yesterday? This is some of the best news I’ve heard in a while. And to hear that Ruth Bader-Ginsburg signed the order. Wonderful.
AnOldMan on June 9, 2009 at 12:40 PM
Put another way…. The Obama plan to sell off Chrysler to Fiat was so bad that it didn’t even pass muster with Ginsberg.
Actually, I suspect the deal is questionable because it puts
the interests of unsecured debtors ahead of those who secured debts. A ruling in favor of this deal would absolutely shake up the way the new President of Government Motors deals with its creditors.
highhopes on June 9, 2009 at 1:05 PM
When race is the only card you brought to the table……
BobMbx on June 9, 2009 at 3:40 PM
If Ginsburg can see what a mess we’re headed for through those liberal spectacles or hers—and decides to put a roadblock or two in the way of the Administration— then that’s really saying something.
Brooklyn Dave on June 9, 2009 at 3:49 PM
As I see it, this is not about the money, but the rule of law. If we can not count on the laws being followed and contracts being honored we are done as a Constitutional Republic.
I hope the Supreme Court has the guts to make Obama and his team get back into their proper role and out of the bankruptcy court’s business.
bonnertk on June 9, 2009 at 4:18 PM
SCOTUS please give the socialists a kick to the groin and kill this government thuggery now!
jwp1964 on June 9, 2009 at 6:43 PM
It’s over – SCOTUS joins the Fascists.
Cowardice.
HondaV65 on June 9, 2009 at 7:35 PM
SCOTUS has just betrayed the people and constitution of the United States of America, THEY HAVE IN FACT RULED THAT THE FIFTH AMENDMENT TO THE CONSTITUTION IS UNCONSTITUTIONAL.
doriangrey on June 9, 2009 at 7:40 PM
Let me walk that declaration back – I only found one source for the report and it was buried. This should be huge news if true and I just don’t see enough news outlets carrying it yet. Maybe their slow – then again – maybe the story is wrong.
HondaV65 on June 9, 2009 at 7:59 PM
Take no steps back here is the Foxnews headline…..
doriangrey on June 9, 2009 at 8:03 PM
Yeah NYT now has it too.
Well … looking at this … one can only conclude that the SCOTUS doesn’t have the sense of “urgency” concerning recent events as we do.
This is very bad news. With Obama firmly in control of the Executive Branch, Legislative Branch, News Media and most of the Judiciary – we really needed a SCOTUS that was willing to don the body armor and go to battle.
That is not going to happen now. Appears the Roberts’ court watch the show from the sidelines.
A Perfect Storm.
HondaV65 on June 9, 2009 at 8:08 PM
Nope, the perfect storm hits tomorrow with the opening bell of the New York Stock Exchange. Watch the Dow lose at least 2000 points before trading is halted. The SCOTUS just declared Bonds worthless and financial contract law unenforceable.
doriangrey on June 9, 2009 at 8:11 PM
North Korea plans to buy the now defunct Plymouth brand.
It wants the tooling and dies to build a 1957 Plymouth Savoy with push button transmission, for travel by the heads of state.
Jeff from WI on June 9, 2009 at 8:43 PM
I read the order at SCOTUSblog and the denial of stay makes no determination of the underlying legal issues. The order itself makes specific mention of in a “close case” harm to parties is weighed against larger public interests. The court is not sanctioning the strategy here but it doesn’t really do much to give the administration pause before they continue with more Chicago style tactics. Overall, I am really disappointed with this result.
msmveritas on June 9, 2009 at 8:45 PM
Looks like they Changed their mind. Good grief : [
General America on June 9, 2009 at 9:24 PM
The 2010 Fiat Roadrunner Superbird.
Jeff from WI on June 9, 2009 at 10:40 PM
Comment pages: « Previous 1 2 3