Monday, June 8, 2009

Ginsburg Blocks Chrysler Sale to Fiat

Is The Rule of Law Finally Making a Comeback?

Unarguably the most Liberal member of the United States Supreme Court, Ruth Bader Ginsburg – this evening issued a stay on the sale of Chrysler Corporation assets to Fiat of Italy.

Ginsburg issued the stay “pending further order” which indicates the delay may only be temporary until Ginsburg herself rules, or she forwards the matter onto the full United States Supreme Court.

At issue in the Government hurriedly-brokered sale of Chrysler Assets is whether or not secure debtholders (those with contracts on Chrysler’s debt) have gotten the shaft in favor of union members who did not hold debt within the company.

As secure debtholders, pension funds such as the Indiana Teachers and Indiana State pension have been fighting the sale of Chrysler to Fiat in order to secure more value for the debt they hold.  This is good fiscal management on the part of the pension funds, who have a fiduciary responsibility to their clients, and a contractual obligation with Chrysler corporation and the pension funds. 

As part of Chrysler's restructuring plan, the automaker's secured debt holders (ie: pension funds) 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.

Maybe the country is finally waking up to what Obama and his government minions really are after all.  We’ll reserve judgement however until the United State Supreme Court rules on this issue. 

Odd though it would be, that Ginsburg in accepting the matter has set the stage for a legal showdown between the rule of law and the United States Constitution, vs. the Marxist/Socialist ideology of Barack Hussein Obama and his minions.

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