Supreme Court Delays Chrysler Sale
http://www.howeypolitics.com/2009/06/08/supreme-court-delays-chrysler-sale/
The U.S. Supreme Court has delayed the merger of Chrysler and Fiat late this afternoon. The Supreme Court will delay the sale of assets until it hears the appeal by Indiana Treasurer Richard Mourdock, who said the Chrysler-Fiat deal harmed three Indiana pension funds.
Justice Ruth Bader Ginsberg issued the delay just moments ago. It will be referred to all nine Supreme Court justices. There is no indication when the Supreme Court will hear the case. Fiat SP had wanted this sale consumated by June 15.
Without Ginsberg’s decision, the Chrysler/Fiat merger would have been signed at 4:01 p.m.
Now the future of Chrysler is up in the air and analysts believe the delay could scuttle the deal, sending Chrysler into liquidation.
“We’re hoping that the Supreme Court interprets the law,” said Tom Lauria, the attorney who pressed the case for Treasurer Mourdock. Lauria said that the case is not against Chrysler or Fiat. “We hope it will be done in a lawful fashion.”
Lauria said that he is awaiting word on when the Supreme Court will act. The current order simply stays the merger.
At stake could be 5,000 Chrysler jobs in Kokomo and thousands more in auto supplier companies across the state, including Cummins Engine in Columbus.
“All the cards are back in the air,” said CNN analyst Jeffrey Toobin.
Mourdock pressed the case after consulting with Indiana Gov. Mitch Daniels, who urged Mourdock to appeal the sale. It sets up an unprecedented situation where two Indiana government executives appear to be blocking a corporate merger with thousands of jobs hanging in the balance.
Earlier in the day the Justice Department urged the U.S. Supreme Court today to uphold the sale of most of Chrysler LLC’s “good assets,” and allow it to emerge from bankruptcy.
In a 26-page brief filed by the solicitor general, the government argued that Chrysler would be worth only $800 million if forced to liquidate.
Under the bankruptcy exit plan upheld Friday by a federal appeals court in New York, the Treasury Department has agreed to give the holders of $6.9 billion in secured debt a total of $2 billion in cash — or 29 cents on the dollar.
“The bankruptcy court found that the challenged sale is the only feasible alternative to liquidation, and that applicants would receive no more under a liquidation than they will receive if the sale goes forward.
Absent a persuasive reason to believe that one or both of those findings is erroneous — and applicants offer none — a stay would not alleviate the injury that applicants have identified,” the government wrote in its brief.
Late Friday night Mourdock said, “As the case has moved through the entire court system, it’s becoming increasingly apparent to financial analysts and legal observers that our case and claims are about much, much more than simply Chrysler’s assets.
It’s about more than the interest of Hoosier retirees; it’s about rule of law. ”
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Hear, hear!
(By and large, they're honest hardworking, dedicated guys)