Ginsburg Temporarily Stays Chrysler Sale to Fiat (Update: Supremes Won’t Hear Appeal)
The Supremes wouldn’t DARE cross Dear Leader, would they?
Well, maybe (copied in full because the AP will certainly expand the report between now and when I can get back to this):
Supreme Court Justice Ruth Bader Ginsburg has temporarily delayed Chrysler’s sale to Fiat.
Ginsburg says in an order Monday that the sale is “stayed pending further order.”
The action indicates that the delay may only be temporary.
Chrysler has said a delay could scuttle the deal.
A federal appeals court in New York had earlier approved the sale, but gave opponents until 4 p.m. EDT Monday to try to get the Supreme Court to intervene.
Ginsburg issued her order just before 4 p.m., when Chrysler would have been free to complete the sale of most of its assets to Fiat.
Ginsburg could decide on her own whether to extend the delay or ask the full court to decide. It is unclear when she or the court will act.
Tick tock. As noted last week, Fiat can walk away on June 15 if there is no deal.
That’s a “clever” sentence (“The action indicates that the delay may only be temporary”). How does Ginsburg’s action indicate anything? Given that Ginsburg didn’t have to grant a stay at all, it would seem to mean a bit more than nothing. The “clever” sentence also conveniently overlooks the fact that “One judge on the three-judge panel suggested the Supreme Court should have ‘a swing at this ball.’”
My guess is the AP’s framing is an attempt to tell the TV networks and others who might use this report that “Hey, this really isn’t that important. We don’t want readers and viewers to know that the Dear Leader’s Chrysler deal is shafting teachers and construction workers, and why it might get stopped. So don’t mention it, OK?”
Thought: I haven’t seen or heard of any of the usual “expert” suspects predict the outcome of this matter. Instinct: This would lead you to believe that an Obama victory here is not a slam-dunk.
Exit question: Will the administration be able to resist the urge to directly or indirectly contact (i.e., pressure and/or illegally tamper with) one or more of the justices?
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UPDATE, June 9: dscott in comments has noticed Fiat saying it won’t walk away. Instinct: This is what you say when you believe the Supremes are going to give the matter due consideration and extend them to near, at, or past the June 15 deadline. Instinct II: “Don’t worry, Barry. We’ll hang with you” (said by Fiat’s biggies before booking one-way flights back to Turin). Overconfident Instinct III: Fiat may back out to SAVE Obama from what would be a disastrous ruling by the Supremes, who I think would probably then drop the case.
UPDATE, JUNE 9, 11:15 p.m.: The pension funds have lost —
Late Tuesday, the Supreme Court turned down the opponents’ last-ditch bid. The court issued a brief, unsigned opinion explaining its action. To obtain a delay, or stay, someone must show that at least four of the nine justices find that the issue raised is serious enough to warrant hearing a full appeal and that a majority of the court will conclude the lower court decision was wrong.
“The applicants have not carried that burden,” the court said.
The court did not consider the merits of the opponents’ arguments, only whether to hear their full-blown appeal.
If there’s a silver lining, it’s that the failure by the litigants to “carry the burden” may be more related to the size of the funds in proportion to the total debt involved $42 million compared to $6.9 billion) than the substance of the case, and that a course with more dollars involved might have been heard. I would hope that GM debtholders will test that proposition. The continuation of contract law as we know it may depend on it.
Why would Fiat walk away from a deal that gives them 20% for not putting a cent into Chrysler and gives them access to all the dealer network they don’t currently have? Something doesn’t jibe here.
The real deal here is the rush to prevent a due diligence over the Bankruptcy Law. The Unions and the Government would be the losers if things were actually negotiated and not holding a gun to everyone’s head. TARP was nothing more than a smoke screen to hijack a bunch a companies. How long could the Unions and government hold on if there was a delay?
Comment by dscott — June 8, 2009 @ 4:46 pm
dscott, you ask why would Fiat walk away? Look who they are dealing with for one. Obama and his goons have shown a marked diligence for changing details at the last moment and/or attaching strings to any deal. They might figure once a deal is done, Dear Leader might throw his weight around and ask for and do who knows what.
Second, it’s 20% of a screwed up company with a government backed flawed business model relying on the worst car since the Edsel. The dealership network is equally screwy where for political reasons more profitable dealers may have been axed in favor for weaker ones.
They are many reasons to walk away, just as many as there are to stay, anyway.
Comment by fz — June 8, 2009 @ 6:31 pm
#2, Ehem…
http://www.foxnews.com/story/0,2933,525502,00.html
Fiat Won’t Walk Away From Chrysler Deal
BTW: Fiat comes from the land of unions: Italy.
Maybe you are not old enough to remember the constant strikes that were continuously in the news in the 1980s. Fiat is used to union cronyism and corruption. It’s a natural fit for them at Chrysler where the government and the unions are walking hand in hand to run things.
Comment by dscott — June 9, 2009 @ 9:26 am
None of this would be happening if our car companies made a decent car that could compete in a world economy.
Maybe with Fiat they can make some affordable cars that are made well and look good for a change.
Comment by Chris R — June 9, 2009 @ 1:11 pm
It is nice to see someone taking the time to think before making a decision that effects so many people rather than the typical knee-jerk reactions of our elected officials.
Comment by C Ronk — June 9, 2009 @ 1:12 pm
#4 and #5, since you’re from the same IP:
- Yes, we’re supposed to be a nation of laws, not of authoritarians. We’re going to see a big clue as to whether that is still the case shortly.
- From what I’ve seen of Fiat cars, your hopes for “cars that are made well and look good for a change” look like wishful thinking.
Comment by TBlumer — June 9, 2009 @ 1:31 pm
When Obama speaks of “saving” jobs in the US he is not telling us he’s counting redistributed jobs. As Hummer goes to the Chinese and Chrysler goes to Fiat, we also hear that Microsoft will likely redistribute its workforce out of the US in response to Obama’s tax changes. I won’t buy another GM product as long as Obama and the unions are running it.
Comment by Michael — June 10, 2009 @ 8:13 am
The court did not consider the merits of the opponents’ arguments, only whether to hear their full-blown appeal.
Which is exactly how Obama skated on the birth certificate issue. The court is not interested in justice, just the parsing of legal opinions it so chooses to get involved in some academic manner. Something is truly wrong with the courts when facts are less important than the arguments.
Since the courts have essentially upended contract law for political expediency, they have sacrificed the long term good for the short term gain. In doing so the whole risk versus reward paradigm has been changed. Bonds are now equally risky as stocks, only deposits in banks are less risky. That means the risk premium must now go much higher to reflect the proper return on investment, so interest rates, especially that of corporate bonds must go much, much higher! The volatility of interest rates will now be similar to that of stocks.
Like the taxpayers in CA, the investors will strike back in every manner at their disposal. Just because Obama and the Dems seem to have all the cards, doesn’t mean we are powerless to resist, it only means we are now even more willing to pick up sticks and poke them in the eyes at every opportunity.
Comment by dscott — June 10, 2009 @ 8:57 am