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Supreme Court Blocks Chrysler Asset Sale

It's not clear yet how this will turn out but it is significant that the court wants to take a closer look:

WASHINGTON (MarketWatch) -- The U.S. Supreme Court blocked the sale of Chrysler's assets after a group of Indiana pension funds appealed the sale. The funds argued that the sale of Chrysler to Italian automaker Fiat is unconstitutional. A court spokesman said that the sale is stayed "pending further order of the court."

From Bloomberg:

June 8 (Bloomberg) -- Justice Ruth Bader Ginsburg ordered a delay in Chrysler LLC's planned asset sale to a group led by Italy's Fiat SpA while the U.S. Supreme Court considers a request for a longer postponement that might scuttle the deal.

SCOTUSBLOG has more. The delay may just be procedural:

Among the likely explanations for her action:

* Ginsburg may have decided to share the decision on what to do with her eight colleagues, and they needed more time to think or talk about it.

* Members of the Court may have decided that they wanted to give some explanation, or perhaps some may have decided to dissent and wanted a chance to prepare a statement saying so. In the meantime, it was her task, as the Circuit Justice, to impose a limited stay.

* Ginsburg or the Court may be waiting to see how the Second Circuit explains its decision to uphold the terms of the sale. The Circuit Court issued no opinion on Friday, indicating that such an explanation would come "in due course," although the expectation was that one or more opinions would emerge from those judges on Monday.

The wording of Ginsburg's order -- "stayed pending further order" -- is the conventional way by which a Justice or the Court carries out an action that is expected to be short term in duration, and not controlling -- or even hinting at -- the ultimate outcome. Any speculation that her order meant the Court was leaning toward a further postponement would be unfounded.


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Comments (25)

It's unclear how how long t... (Below threshold)
Paul Hooson:

It's unclear how how long this stay order will stand, maybe for an hour, maybe for a week. But it only complicates the survival of Chrysler as Fiat is seen as somewhat unwilling partner here.

Thank you Judge Ginsberg.</... (Below threshold)
ODA315:

Thank you Judge Ginsberg.

complicates the survival of... (Below threshold)
ODA315:

complicates the survival of Chrysler

I guess we disregard contract law to insure Chrysler "survives"? Oooops, I mean that the UAW "survives".

Any company that is dependi... (Below threshold)
sam:

Any company that is depending upon Fiat for survival is doomed anyway.

Bond holders contractually ... (Below threshold)
WildWillie:

Bond holders contractually come first, unions later. That simple. ww

I guess Paul does not belie... (Below threshold)
Zelsdorf Ragshaft III:

I guess Paul does not believe in the rule of law. If Ginsburg was acting at the behest of the rest of the court because they want to be involved in what they see as an overreaching administration bent on ruining and ignoring our system of laws. TARP money should not be spent to bail out the automobile industry. Obama knows how to rule but he knows nothing of governing.

Ginsberg is probably checki... (Below threshold)
retired military:

Ginsberg is probably checking with Obama to ensure he has everything covered on his side before allowing the sale to go through.

Hmmm. So will you side wit... (Below threshold)
SCSIwuzzy:

Hmmm. So will you side with the workers or the investors when your super market goes under, Paul?

Zeldorf, I never addressed ... (Below threshold)
Paul Hooson:

Zeldorf, I never addressed the rule of law issue here. You presume way too much. The temporary stay on the sale of Chrysler only gives a group of three pensions funds lawyers a little more time to see if the full court will review the full legality of the Chrysler sale, that's all. If the full court decides to review the legality issue, then that's something else to be considered here. But for now this stay is just that, a temporary pause on any further Chrysler sale to Fiat action, that's all. However, FDR's executive branch did run into some legal problems with the Supreme Court with some of his economic recovery actions, but whether the actions of the Obama White House rise to those levels has not been addressed yet by the court. Maybe someone here is a corporate attorney who can speak to these issues?

The MarketWatch article say... (Below threshold)
iwogisdead:

The MarketWatch article says that the Pension Funds argued that the sale is unconstitutional, but that's not the whole story (I don't see any Constitutional argument in my first scan of the Application).
The Pension Funds argued that the sale of assets (and the restructuring forced by the gov'mint) would undercut their rights as secured creditors.
Here's the application:
http://www.scribd.com/doc/16208738/16204479-Chrysler-Stay-Application
[Sorry if I can't get the fricking link to work]
I'm guessing the Court is going to use a real simple Bankruptcy Law analysis to say that they can't change the rights of secured creditors in this situation.

Paul is just a union toadie... (Below threshold)
Codekeyguy Author Profile Page:

Paul is just a union toadie. (Until, of course, the unions start playing hardball with him)
Maybe like the reporter that was recently gang-raped by the taliban, but said (I kid you not) "They really respected me." Remember, Paul, the unions will respect you, too.

Talk about your Karma. The... (Below threshold)
GarandFan:

Talk about your Karma. The most liberal president ever, just screwed by one of the most liberal Supreme Court Justices. Karma, baby. Karma.

Good question you bring up ... (Below threshold)
SCSIwuzzy:

Good question you bring up Codekeyguy... are the workers at Paulmart union workers? After all his father did so well with the unions.

All right Paul, please expl... (Below threshold)
Zelsdorf Ragshaft III:

All right Paul, please explain which law it is that giver the POTUS the power to take money authorized by Congress (TARP) to bail out financial institutions and use it to literally take over two major players in the U.S. auto industry? What section of Article II of the Consitution gives him the authority to oversee a corporate bankruptcy which is the baliwick of the court system? Where does he (Obama) get the authority to fire the CEO of GM? Answer me Paul.

As I understand it, this pe... (Below threshold)

As I understand it, this petition was filed
under this: ERISA

http://benefitslink.com/erisa/crossreference.html

A typo in a previous post. ... (Below threshold)
Zelsdorf Ragshaft III:

A typo in a previous post. I typed giver should have been gives. Still waiting for an answer Paul.

Damn Zelsdorf, I believe it... (Below threshold)
ODA315:

Damn Zelsdorf, I believe it's in section 5,.....(Obama's special copy).

Section 6 covers giv... (Below threshold)
ODA315:

Section 6 covers giving federal funds to neighborhood organizing groups (but only when under indictment).

Section 7 deals with using federal funds and authority to payback campaign doners (to include labor unions and car dealers)

make that "donors"... (Below threshold)
ODA315:

make that "donors"

Zelsdorf, so far in neither... (Below threshold)
Paul Hooson:

Zelsdorf, so far in neither the 1979 Chrysler bailout, nor this 2009 Chrysler bailout, no court has ruled the actions of the executive branch to have acted illegally so far. Until a judge rules as such, I strongly invite you to reserve your judgment as well.

hooson - "Zelsdorf, so ... (Below threshold)
marc:

hooson - "Zelsdorf, so far in neither the 1979 Chrysler bailout, nor this 2009 Chrysler bailout, no court has ruled the actions of the executive branch to have acted illegally so far."

hooson you're such a friggin' tool!

Was the 79 Chrysler bailout conducted under "obama rules" or was it handled in the long established method that dates back over a 100 years?

To even make that sorry-assed comparison demonstrates how silly you truly are.

Gee Paul, I somehow thought... (Below threshold)
Zelsdorf Ragshaft III:

Gee Paul, I somehow thought in 79, congress authorized the money for the loan to Chrysler. I think that is because Congress is suppose to deal with all things financial (power of the purse strings). Under the Obama dictatorship we have treasury with a slush fund (some would call illegal) dealing with bailout (buyout) of troubled business and industry. If the government takes tax dollars to buy GM, and it takes common stock as a result, shouldn't that stock be distributed to the tax payers who actually own the stock?

Yes Paul, Are We not at lea... (Below threshold)
914:

Yes Paul, Are We not at least entitled to dividends 4 times a year? Or is this filed under "FULFILLING ONES PATRIOTIC DUTY"

Thank You judge Ginsburg.. ... (Below threshold)
914:

Thank You judge Ginsburg.. You are now officially wrong only 99.8% of the time.

SCOTUS folds. "A s... (Below threshold)

SCOTUS folds.

"A switch in time saves nine."




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