The sale of Chrysler to Fiat is now not a “done deal”:
WASHINGTON (AP) – Supreme Court Justice Ruth Bader Ginsburg on Monday delayed Chrysler’s sale of most of its assets to a group led by Italy’s Fiat, but didn’t say how long the deal will remain on hold.
Ginsburg said in an order that the sale is “stayed pending further order,” indicating that the delay may only be temporary.
Chrysler LLC has said the sale must close by June 15, or Fiat Group SpA has the option to walk away, leaving the Auburn Hills, Mich., automaker with little option but to liquidate.
But a trio of Indiana state pension and construction funds, which hold a small part of Chrysler’s debt, have been fighting the sale, claiming that it unfairly favors Chrysler’s unsecured stakeholders ahead of secured debtholders like themselves.
As part of Chrysler’s restructuring plan, the automaker’s secured debtholders will receive $2 billion, or about 29 cents on the dollar, for their combined $6.9 billion in debt. The Indiana funds bought their $42.5 million in debt in July 2008 for 43 cents on the dollar.
The funds also are challenging the constitutionality of the Treasury Department’s use of money from the Troubled Asset Relief Program to supply Chrysler’s bankruptcy protection financing. They say the government did so without congressional authority.
Consumer groups and individuals with product-related lawsuits also are contesting a condition of the Chrysler sale that would release the company from product liability claims related to vehicles it sold before the “New Chrysler” partnered with Fiat is created.
I am torn on this.
The pension funds do deserve to be funded but not fully, they should have to go to the same percentages as the bond holders. Yes it was Chryslers fault for not funding it during the good years (did Chrysler have any in recent memory?). It was Chrysler’s fault for agreeing to some fairly outragious terms, but it is a legal contract to which they should be held.
The govt should not hold stock they should have a default/bankruptcy proof bond with NO VOTING RIGHTS. The govt should get OUR money back FIRST then the others can split the rest.
If FIAT goes thru with the purchase they would be liable for the govt holding bond.
OMG!! I know this is totally off topic, But I just saw SotoMayor break her ankle while trolling round Capitol Hill.
Gotta Watch those “Cloven Hooves” you racist monster!!
WMD,
So your pissed that he bailed them out and your pissed that he didn’t bail them out or protect the workers.
Which is it?
I say fuck them all, he should not have bailed them out, period. That means the employees lose everything.
Can’t have it both ways so stop complaining.
All sides should have there rightful place in line in any court settlement, but the question is if the executive branch over-stepped their authority by using tarp funds intended for the bank bailout to bailout the auto industry–this is the rub. And on this its quite clear the Obama people are pushing the envelope.
Consumer groups and individuals with product-related lawsuits also are contesting a condition of the Chrysler sale that would release the company from product liability claims related to vehicles it sold before the “New Chrysler” partnered with Fiat is created.
Some of the lawsuits might be frivolous. But from what I can gather, all such lawsuits are not.
Why should Chrysler-Fiat be able to squirm out of accountability in that regard?
AOW: and they should not. It is the FORCING of the sale of this AMERICAN company that should be the reprehensible act.
BZ
BZ, right.. This doesn’t need further analyzation..The writing is on the wall: It is the FORCING of the sale of this AMERICAN company that should be the reprehensible act.
DITTO BZ and Rivka! This is only one of the things Obama is doing that proves he completely ignores our Constitution.
This is why it is wrong for government to get involved in bankruptcy: politics seeks unequal ends in our modern times. Bankruptcy procedures done properly, without favoritism based on politics, would have allowed these companies to pare down their obese holdings, their unsupportable dealer networks, and allowed liquidation of unprofitable assets by selling them off… particularly name-brands. Those who have secured holdings via bonds count on the proper legal process to be done. Those with unsecured holdings know that they get what they can after those with secure holdings are compensated.
Going into bankruptcy for both these companies last October would have had them done with their restructuring by now, other companies purchasing brands, and Chyrsler probably merged or purchased by Fiat while GM would have come out as a finance company with some technology areas and possibly one or two car/truck lines.
And not cost the US taxpayer tens of billions of dollars that have gone to absolute, and utter waste propping up these companies as they failed without a plan.
I am sorry that those Unions did not invest in secured holdings… quite sad they exercised no foresight in that. They had a chance to do so, to negotiate, to deal with the problems of labor practices and obscene retirement benefits. A pity they didn’t. The Union members should take their Unions to court to get what they signed up for… which would have, quite possibly, put the UNIONS in bankruptcy court where they belong. That would make a lovely class action suit, is my guess, to see how corrupt and ill-run the Unions have been… but they have had that day put off by politics and we are paying for it.
You are paying for it.
I am paying for it.
Every citizen is paying so that a few may have a corrupt Union that is ill-run. So lovely, isn’t it? That our tax dollars now directly fund a political kick-back scheme for purely partisan interst? That is what the Unions are doing, in case folks have missed it, by supporting one party that caters to them.
Of course the government has already been doing that for awhile, the deciding what companies should do bit and what not to disclose to those they have a duty to tell… and one of the main causes for this fiasco is now at the head of the Treasury Dept. Trying to be King Canute is very costly to do, and we are so lucky that the Republican party is holding those who helped this mess be accountable… oh… wait… Geithner got to be head of the NY Fed under Bush… hmmmm… so what’s up with the ‘rule of law’ Republicans, anyway? They aren’t holding Canute in the White House accountable, they aren’t holding the bozos in the Federal Reserve accountable, they aren’t trying to hold hearings on the Constitutionality of all this… must be shocked Hamiltonians seeing that a robust government presence in the economy isn’t a good thing.
Time to wake up!
AJ: precisely! And YES, time to WAKE UP!
BZ
I consider both companies dead in the water. Michigan is going to have to look elsewhere. The person who replaces Granholm will have their work cut out for them.
As bad as things were before NObama, they are worse, much worse now. Every bit of meddling the government has done has only served to make it even harder to repair, if indeed things are even still repairable. I for one am sick and tired of that imbecile testing unchartered waters. We have a constitution that forbids almost everything that idiot has done and yet no one does anything about it.
Average American said “We have a constitution that forbids almost everything that idiot has done and yet no one does anything about it.”
So…you’re talking about Bush, right?
Rando
Try reading the entire responce or does your attention span not last that long? Or is it your lack of comprehensive abilities?
First they bailed out the banks, and no one protested…
Then they bailed out AIG and no one protested…
Then they bailed out the autocompanies and no one protested…
Now we find that government feels it owns those.
Next up: Airlines, Unions, the rest of the financial sector…
And then we shall all be owned by government in a big company town that was once a Nation and will become a prison camp.
Then we fail.
And things get messy after that.
Very messy.