Supreme Court asked to block Chrysler sale to Fiat

By MARK SHERMAN, Associated Press Writer Mark Sherman, Associated Press Writer – 54 mins ago

WASHINGTON – Three Indiana state pension and construction funds want the Supreme Court to block Chrysler's sale to Fiat so they can pursue an appeal in hopes of getting a better deal.

The funds filed emergency papers at the high court early Sunday.

An appeals court in New York approved the sale Friday, but gave objectors until Monday afternoon to try to get the Supreme Court to intervene. Chrysler LLC wants to sell the bulk of its assets to a group led by Italy's Fiat Group SpA as part of its plan to emerge from bankruptcy protection.

The emergency request went first to Justice Ruth Bader Ginsburg, who handles such matters from New York. She can act on her own or refer it to the entire court.

The Indiana State Police Pension Fund, the Indiana Teacher's Retirement Fund and the state's Major Moves Construction Fund claim the deal unfairly favors the interests of Chrysler's unsecured stakeholders ahead of those of secured debtholders such as the funds.

The funds also challenged the constitutionality of the Treasury Department's use of money from the Troubled Asset Relief Program (TARP) to supply Chrysler's bankruptcy protection financing. They say the government did so without congressional authority.

The government-sponsored reorganization of the U.S. auto industry, including the Chrysler bankruptcy proceedings, "is a matter of incredibly high profile and importance," the funds said in their request to the high court. "The public is watching and needs to see that, particularly when the system is under stress, the rule of law will be honored and an independent judiciary will properly scrutinize the actions of the massively powerful executive branch."

U.S. Judge Arthur Gonzalez, the bankruptcy judge overseeing Chrysler's case, approved the sale last Sunday, finding that the deal with Fiat was Chrysler's only alternative to liquidation.

The appeals court halted the sale on Tuesday, allowing the funds to appeal Gonzalez's decision. That court ruled against the funds on Friday, but continued to delay the sale so the funds could go to the Supreme Court.

Chrysler had hoped to close the sale by the end of this past week.

Auburn Hills, Mich.-based Chrysler has maintained that the sale must be completed quickly to save the automaker from complete collapse. If the deal doesn't close by June 15, Fiat has the option of pulling out. Production at Chrysler's manufacturing plants remains halted pending the closing of the sale.

Chief Judge Dennis Jacobs of the New York-based appeals court asked Thomas Lauria, the lawyer representing the Indiana funds, why he believed his clients would be better off if the deal with Fiat went away and Chrysler was forced to liquidate.

"You can't wait for a better deal to come in from Studebaker," Jacobs said.

Lauria responded that the sale could be restructured to provide a better return for the secured debtholders.

U.S. automaker Studebaker Corp. closed in 1963.

http://news.yahoo.com/s/ap/20090607/ap_on_go_su_co/us_supreme_court_chrysler

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I hope the Supreme Court does block this deal. I can't believe Obama continued to pour bailout funds into a company that he was eventually going to allow to declare bankruptcy. That is insane.

Congress did not authorize one penny of bailout money for the auto industry. The deal also violates current bankruptcy laws as to how debtholders can recover. I ask again Mr. President, where are the "ethics" you so campaigned about? Evidently, Obama and the Treasury Department now have the power to override Congress and the courts.

Seems to be a trend with everything that is happening. Rush it through so no one knows what is going on. Blame the Bush admin for everything that is happening and why the stimulas and bailouts have done nothing but pad the pockets of special interest groups.
just like the czars all what 18 of them so far. They answer to only Obama, no congressional oversite and are in charge of trillion plus. Oh yea I forgot we also dont know what their salries are. Transparent my arse!

I am not the first to point out that capitalism, having defeated communism, now seems about to do the same to democracy.

How is capitalism defeating democracy? Capitalism would have allowed GM and Crysler to fail because of poor management. The government steping in and bailing them out with billions of our taxpayer money to eventually file bancruptcy and know our money is gone and will never be paid back. That is the total oposte of capitalism.

I would presume then that for the last 8 years you were also screaming from the top of the mountain about the Cheney/Halliburton connection and the Bush/oil connection? Democracy has been highjacked long ago by capitalism. Lets not pick and choose each incident by party affiliation. We have two parties in america both representing the business class.

The government is supposed to be paid back in a couple of years. Taking their hands out of it.

The bad thing about the bankruptcy thing is the devestated individuals that are contained to wheelchairs and such that will now get nothing in the lawsuits to continue with their medical. Their are many that have been waiting for years to get help from those insurance companies. The malfunction of said cars is the reason for the suits.

Kat

sounds like they are not trying to stop the deal. just trying to get a better deal for themselves. just more people trying to litigate a bigger piece of the pie

hmmmmmmm

Something for you to ponder

Well, since I don't think there's a terribly good explanation here, I will try to add to this node.
By definition, capitalism is an economic system based on private ownership of the means of production. Simple, eh? Well, no... When most people speak of capitalism, they are referring to the idea of laissez-faire (let it be) capitalism. Laissez-faire capitalism refers to the complete separation of the government and the economy. Basically, all aspects of the economy should be controlled by private ownership and the government should stay completely out of it. Capitalism seeks to advance society by the pursuit of self-interest, the basic idea being that as an individual creates more wealth for himself, he is also creating more wealth and opportunities for his fellow men.

In a true capitalist system, the Government is only responsible for protecting the people from violations of their individual rights or fraud. The Government should have no ownership or participation in the economy, and should not regulate businesses. Laissez-faire capitalists also believe that the Government should not have any power to break up or regulate monopolies. They feel that in a truly free market, the only type of monopoly that can exist is an earned monopoly, where the company has created a barrier of entry to competition by being very good at what they do through fair competition. Coercive monopolies are formed due to Government interaction in the marketplace by setting taxes, regulations, or territorial limitations.

In addition, the market would act as a safeguard to itself. There would be no need for any government inspection because any product which was unsafe or poor quality would not succeed in the marketplace. Affirmative action would also not be needed, since it is in the company's best interest to succeed, they will hire the most qualified employees because it is in their best interests. In addition, it would promote a cleaner environment because all land is privately held and polluting would either damage your own property, or violate others rights to private property. Since private industry can do anything cheaper and more efficient than the government, education should also be privately run to allow for completion which would improve the quality of education for all.

This is the theory. As with most economic/social systems, the theory is not the reality. True capitalism has never been tried. In the US, there is a mixture of capitalism and various other ideals. The government has significant power over the economy and actively participates in the economy on a daily basis. Government regulation is abundant, welfare is given out daily, there are government sponsored monopolies, and the government owns land and some means of production.

Of course, one of the definitive modern works on laissez-faire capitalism is Atlas Shrugged by Ayn Rand. It's an excellent book (you can read my short version at that node), however I think if she wanted to write a book about how great capitalism is she should have just come out and done so in a lot fewer words without the out of place fictional love stories and all that. But I digress...

Personally, I think Atlas Shrugged points out several flaws in ideal capitalism. Capitalism is party successful because it encourages greed. We are, inherently, a greedy species. We don't want equality, we want to better ourselves. We want to strive to improve our lives. Capitalism allows this, encourages it even. However, it does not allow for unlimited greed. Capitalism assumes that even though we are greedy, we will play by the rules. This fails under circumstances where people are greedy to the point that they will cheat to get ahead, most often in the form of monopolies. I don't believe that a coercive monopoly is impossible in a truly free market, as there are many things a company can do to create an unfair barrier to entry.

I also think capitalism fails to consider that not everyone is capable of contributing to society equally. The true capitalist view is that if you cannot contribute to society, it is due to laziness and incompetence and thus you don't deserve any of the benefits of society. In reality, there are many people who, due to physical or mental limitations, are not capable of caring for themselves without welfare or the compassion of others. Granted there are many people who abuse this, but there are still those who truly need help through no fault of their own.
http://www.everything2.com/index.pl?node=capitalism

I saw no reference to party affiliation anywhere in the statement. He is right. With capitalism, we would have never done the financial bailout. We would never have done the stimulus pork bill. we would never have bailed out chrysler and GM to the tune of almost $60B that will likely not be repaid anywhere in the next decade or so.

And I love how the oil price thing was all Bush's fault... what about now? Why did prices just jump so far so fast? I'm paying $3 a gallon again and I just filled up my tank at $2.30 a couple weeks back. How is that anyone in the government's fault?

You try to blame Bush for his oil ties and previous high prices, then it must be perfectly ok for me to blame this last jump on Obama for his desire to be more green and reduce usage by increasing the cost of gas.

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As for capitalism, it, like any other economic system cannot exist in its pure form. There are always dissenters that will cheat the system.

In the real-world implementation of capitalism, the ideal is whoever can do the job most efficiently should be the one to do the job. That is the core principle of economics. there are cases where the government is more efficient (better service at minimal cost) and some where they are necessary (like law enforcement and the court system). If the government is more efficient, let them have the work. Private companies cannot build and maintain roads for less. They cannot provide better fire service (on a small scale, yes, but when you have the density in a large city of the fire department, competition will not allow the necessary proximity for the required number of stations). These are cases where government should perform the work.

You also point out the promotion of greed as a bad thing. Greed is a product of rational self interest - the ideal that we will not willingly and knowingly make a decision that will put us worse off. Greed is necessary for a thriving society. Greed is drive. No drive means no production.

Hussien did it

I am glad I dont live in your world.

Me2 becuz it iz a world ruled by hussien

Madison, you must be delusional. This is how the world works. Greed pushes everyone, from the CEO wanting another million to the worker at the bottom asking for a raise. Everyone is looking out for #1. That is greed.

I agree I was raised in a christian home and I was taught that greed is wicked.