Court asked to stop Chrysler sale [Obama steals pension funds from teachers and police]

BBC ^ | June 7, 2009

[grundle]

Pension funds opposed to Chrysler's sale to Fiat have asked the US Supreme Court to block the deal immediately.

Three Indiana state pension and construction funds filed papers at the court on Sunday calling for the sale to be halted so they can pursue an appeal.

It comes after a US appeals court approved Chrysler's sale to a group led by Fiat, a union-aligned trust and the US and Canadian governments.

Chrysler entered bankruptcy protection in April after falling vehicle sales.

US carmakers have suffered from a massive slump in sales during the recession.

The US government has backed its sale to the Fiat-led consortium, which would see it emerge from bankruptcy.

Fiat would control 20% of Chrysler, while 68% would be owned by a union trust, and the two governments would share 12%.

However, the pension funds, which hold about $42m (£26.3m) of Chrysler's $6.9bn in secured loans, are opposed to the sale.

They say it inverts usual bankruptcy practice and unlawfully rewards unsecured creditors, such as the union, ahead of secured lenders.

The emergency legal request from the Indiana State Police Pension Fund, the Indiana Teacher's Retirement Fund and the state's Major Moves Construction Fund goes before Justice Ruth Bader Ginsburg.

The judge can act on her own or refer the matter to the full court, when a vote from five of the nine Supreme Court members would be needed to put the Chrysler sale on hold.

If the sale is put on hold by the court, the Indiana funds would then pursue a full appeal.

If the deal is not completed by 15 June then Fiat, which is not paying anything for its 20% stake, has the option of pulling out.

[conservatism_IS_compassion]

The emergency legal request . . . goes before Justice Ruth Bader Ginsburg . . . [who] can act on her own or refer the matter to the full court, when a vote from five of the nine Supreme Court members would be needed to put the Chrysler sale on hold.

Is that true? Can a judge "act on her own," without referring the issue to the full court?

I take that to mean that Justice Ginsburg can grant an indefinite stay so that the pension funds have the opportunity to be heard by the full court. Or, she can refer the question of granting a stay to the full court.

[kittykat77]

I get your point about the overall downturn in the economy. However, by mid-2008 the automakers were already in trouble. For a timeline, see this Reuters article. And don't forget that the US credit market began seizing up in the summer of 2007, a situation that obviously would affect car sales.

I think it's great that the pension funds are fighting back here, but I still shake my head over the initial investment in Chrysler bonds in mid-2008.

[grundle]

Apparently so.

[WoofDog123]

“but I still shake my head over the initial investment in Chrysler bonds in mid-2008. “

something which is not disclosed is whether they had swaps (credit default swaps) on the bonds.