Monday, June 8, 2009

U.S. Supreme Court Delays Sale of Chrysler to Fiat

Chrysler's trip to bankruptcy court and quick asset sale to Fiat was delayed by Justice Ginsburg. WebVisionItaly applauds the court for slowing the process for legal contemplation and further review of an appeal by three Indiana state funds and several consumer groups.

Justice Ginsburg, who handles emergency matters arising from the United States Court of Appeals for the Second Circuit, said in a one-sentence order that the rulings of the bankruptcy judge allowing the sale “are stayed pending further order of the undersigned or of the court." Fiat had originally set a June 15 deadline on the deal.

Until this point, court decisions had fallen Chrysler’s way for much of the bankruptcy reorganization. The carmaker won quick approval of its sale from two lower courts. FIAT’s CEO, Sergio Marchione may find his imperial dreams dashed by losing Opel in Germany and by losing Chrysler in the United States.

This editor supports the court's decision because this editor believes in secured-creditors rights, contract law, and what's left of a free-market system and private companies. The transfer of assets to Fiat may seem nice in theory but there are practical aspects to the business rules and rule of law that the U.S system must adhere to if the music is to keep playing. If not, who will loan capital in the future? We'll see if the Supreme Court respects the rule of law when it makes its ruling. If the court rules in favor of the secured-creditors and against the Obama administration then rule of law will have on this battle, with a war ahead. If the court rules against the secured-creditors by allowing the transfer of good assets to Fiat, thus transfering from secured-creditors assets and capital that creditors have rights to the employees union, then statism will have won this battle and the American people will really be lost in the wilderness, having takenassets from the free marekt system sand stolen them for a foreign company and a union.

If the deal is going through look for an announcement this Friday June 12th, a nice hot lazy summer night when all the reporters are sleeping for the approval of a Fiat Chrysler deal. If the court is ruling against then we'll hear from some government wonk who has never earned a penny or made payroll announce a new government plan Monday on how your tax dollars will go to further fund the white shoes mulling Chrysler Fiat.

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