U.S. top court puts hold on Chrysler sale

[jefferson_dem]

Source: Reuters

U.S. top court puts hold on Chrysler sale
James Vicini and Poornima Gupta, Reuters
Published: Monday, June 08, 2009

The U.S. Supreme Court grants a request to put on hold Chrysler's sale to a group led by Italy's Fiat.

Indiana pension funds and consumer groups had asked the Supreme Court on Sunday to stop the sale of Chrysler to Fiat while they challenge the deal.

The request, which moved the legal battle to the nation's highest court, were filed after a U.S. appeals court in New York approved Chrysler's sale to a group led by Fiat, a union-aligned trust and the U.S. and Canadian governments.


Read more: http://www.financialpost.com/story.html?id=1674437

[Champion Jack]

1. WTF?

[Spouting Horn]

3. Good.

nt

[Abq_Sarah]

4. It will probably be resoved fairly quickly

They need to determine if this violates current bankruptcy law.

[jefferson_dem]

5. Right.

Apparantly, the Court was waiting to get full record from lower courts on stay request. Once they get that, it will likely be dismissed.

[elleng]

2. Solicitor General

Elena Kagan of the U.S. Justice Department, the administration's lawyer before the high court, said in a written argument that a bid by three Indiana pension funds to block the sale could force Chrysler's liquidation.

The Chrysler case could set a precedent for General Motors Corp, which is using a similar quick-sale strategy in its bankruptcy in New York.

[Thrill]

6. I thought the so called liberals on the court were for the workers??

.

[Skink]

7. Oh now they uphold the law.

[jamieque]

8. Uh oh...

This has screw up written all over it. I have this horrible feeling that the Supreme Court getting involved in what is a bunch of greedy assholes who want more money is going to backfire and fuck up Chrysler-Fiat deal.

If that happens these idiots would get absolutely nothing but a dead company that causes more layoffs and economic damage to our already fragile economy. Why the hell did the fucking Court have to get involve now. Like one posters on this topic said, "Now they want to uphold the law!" Where the hell was this mentality when Bush was in power. Dear lord I swear greed assholes will be the ones who will be responsible for killing our nation.

[chicago legal pro]

9. These "greedy assholes" are employee pension plans.

[deminwi]

10. Most people don't get it and it's really sad

Most people think that bond holders are rich bankers, but there could be nothing further from the truth. These "greedy assholes" are retired fire fighters, teachers, and construction workers. I get so disappointed in our world sometimes.

[blue_onyx]

11. They better not screw this deal up

[Romulox]

13. Why not? What is so magical about the US government forcing Chrysler into the arms of a foreign co.

which is bringing little or no cash to the deal, while forcing "concessions" from all the other stakeholders (most prominently including workers and retirees)? And all of this against a backdrop of $180 billion of taxpayer dollars to AIG alone, with which it paid off its "counter-parties" (which, it turns out, where mostly foreign banks) at 100%? Meanwhile, the Obama admin proposes to send ANOTHER $100,000,000,000.00 to the IMF while pleading poverty at home...

Why in hell should a domestic pension fund agree to an undervaluation of its claim in bankruptcy under such facts?

And what's with the mania for getting this done so swiftly? We're still waiting for Citibank, AIG business plan, after all... :shrug:

[blue_onyx]

15. I'm not happy about a forced bankrupcty but

but Fiat could abandon the deal all together. I prefer this deal instead of a liquidated Chrysler.

Why are you defending financial institutions, like these pension funds, many of whom WANT Chrysler to go under?

[Romulox]

19. "U.S. Pushed Fiat Deal on Chrysler"

WASHINGTON -- The Obama administration rushed an alliance between Chrysler LLC and Fiat SpA despite Chrysler's worries about Fiat's financial health and its willingness to share technology, according to internal company emails.

http://online.wsj.com/article/SB124424451815990495.html#articleTabs%3Darticle

"Fiat could abandon the deal all together. I prefer this deal instead of a liquidated Chrysler."

So what? Remember Daimler Chrysler? It's what DESTROYED Chrysler in the first instance. At any rate, a forced sale to Fiat or a liquidation is a false dichotomy. There were (and are) other options.

"Why are you defending financial institutions, like these pension funds"

Er, Fiat is also a for profit institution.

"many of whom WANT Chrysler to go under?"

I don't know if you're paying attention, but the Obama administration has decided that "Chrysler" will go under in this process regardless. The only question is who will benefit from it.

[blue_onyx]

23. "There were (and are) other options"

Care to share any? I don't think there are any. Chrysler's viability plan is built around 10 vehicles, 9 of which rely on getting technology from Fiat. If Chrysler's future plans almost completely depend on Fiat, how are there other options?

[Synicus Maximus]

22. Could it be because these pension funds are the funds that

retired workers are counting on for part of their retirement income? How come people get upset if the UAW retirees have their pensions threated but if it is a teacher retirement fund or a firefighters retirement fund etc. they are no longer workers retirement they are just "financial institutions".

[blue_onyx]

24. How come so many on DU don't care about automotive pensions

that would be effected by Chrysler liquidating but then expect everyone to care about other people's pension?

[jtb33]

27. Look, there's no win-win in this...

But the law says that the bondholders must come FIRST in bankruptcy. That's what this suit is about (mostly). If the court decides to make an exception in this case, bonds (which were one of the SAFEST investments) will be completely undesirable - no one will want them since their main allure will be *gone*.

[Romulox]

12. Good. This deal stinks, imo, and there is no reason it can't be held up to close scrutiny. nt

[dipsydoodle]

14. Its an odd "sale " anyway

given there are no funds involved : straight technology swop. Depsite that I'm not sure what would happen if Fiat now legged it. Were there any other interested parties at all ?

[bongbong]

17. I'll help Chrysler out!

I'm an interested party.

I'll swap Chrysler 1000 shares of dot-com that I still have (now trading at about 6/10 of a cent) for a new Viper. It'll help reduce the inventory they have to move if they go bye-bye. Think of it as a win-win.

[liberal N proud]

16. I am beginning to believe that someone wants this country to fail

It is strange that these people are doing whatever they can to destroy any and all manufacturing in this country.

Indiana funds have sought greater compensation for their portion of Chrysler’s $6.9 billion in secured debt. They have also argued that the Obama administration illegally used federal bailout money earmarked for financial institutions to help Chrysler.

[bongbong]

20. There's ALWAYS something to manufacture.

I've heard there's a remake of "The Graduate" being planned, where instead of the guy telling the Dustin Hoffman character "Plastics", he says "Soylent Green".

[liberal N proud]

21. Always something to manufacture but where will it be manufactured?

China?

[bongbong]

30. Soylent

Soylent Green needs to be made close to where it is consumed. It will always be made in USA.

[tocqueville]

18. wait until Peugeot is involved...

Perhaps we saw this one coming: Just a week ago, Fiat CEO Sergio Marchionne (pictured) told the media that he didn’t think Fiat could survive the market downturn without working directly with another manufacturer. Now comes a report that Fiat and PSA Peugeot-Citroen are considering merging with the help of French president Nicolas Sarkozy and Italian Prime Minister Silvio Berlusconi.

Italian business newspaper Milano Finanza reported over the weekend that Berlusconi’s office had spoken with Sarkozy’s office regarding a potential tie-up between the two manufacturers. Berlusconi’s office has been considering following the lead of France and Sweden by offering some financial aide to domestic automakers.

John Elkann, chairman of IFI, Fiat’s controlling shareholder, will meet with Berlusconi on Wednesday for an undisclosed purpose. The Italian paper suggested that the meeting could discuss a French-Italian merger.

The two automakers have had joint-ventures in the commercial vehicle and minivan segments, but both compete heavily in the small car market. Combined, Fiat, Peugeot and Citroen produced 6.2 million vehicles last year, about the same number as Volkswagen and Renault-Nissan. If the automakers joined forces, they would compete with Renault-Nissan for the title of fourth largest automaker.

http://www.leftlanenews.com/fiat-peugeot-citroen-considering-merger.html

[CK_John]

25. IMO, Fiat is in over their heads and will backout of the merger. n/t

[blue_onyx]

26. According to Bloomberg

"Moments after her order was issued, Fiat Chief Executive Officer Sergio Marchionne said in a telephone interview that the company will “never” walk away from the deal. The company previously set a June 15 deadline for completion."

http://www.bloomberg.com/apps/news?pid=20601087&sid=aRxvFzweBFuY


I'm happy to hear this.

[xchrom]

28. well this potential merger and the potential chrysler

buyout -- and now the hold makes all of this really really interesting.

[dipsydoodle]

33. See #32 below

A lot can happen in the space of 12 hours.

[TaxCollector]

29. GM and Ford Would Be Better Off

As Comrade Stalin used to say, "they need to be liquidated". This would give GM and Ford a better chance at competing against Toyota, Honda, Nissan, and the others. If they had been liquidated in 1979 instead of being bailed out, Ford and GM might have been more profitable over the years.

[ddiver]

31. When was Ford bailed out?

[dipsydoodle]

32. Fiat dismisses Chrysler deadline

Fiat has said it will go ahead with its deal to take 20% of Chrysler, even if a US Supreme Court ruling means it misses a 15 June deadline. http://news.bbc.co.uk/1/hi/business/8090438.stm

Looks like any interested parties who thought this would cause Fiat to walk away are sadly mistaken.

[Cessna Invesco Palin]

34. What kind of stupid fucking state invests part of its pension fund in Chrysler? n/t