Obama Sets Out To Bully The Supreme Court On Chrysler Ruling
The Supreme Court has put a hold on the Obama-orchestrated Chrysler deal until an appeal by some of the company’s bondholders is sorted out. And how does the Obama administration react to that? By announcing that Chrysler will go out of business next week if the SCOTUS doesn’t dismiss the case.
The US government and Fiat have warned that Chrysler could go out of business as soon as next week if the Supreme Court does not quickly reject an attempt by three Indiana pension funds to block the bankrupt carmaker’s restructuring.
The warnings are contained in filings submitted in the wake of the court’s decision on Monday to delay an alliance between Fiat and a “new” Chrysler while the judges consider whether to hear the pension funds’ case.
The funds, which hold $42m of Chrysler’s $6.9bn in secured debt, contend that an offer to pay them 29 cents on the dollar violates their creditor rights. A United Auto Workers union healthcare trust - a more junior, unsecured creditor - would receive far more favourable treatment under the restructuring, including a 55 per cent equity stake.
Got that, Supreme Court? You’d better act, and act the right way, or Chrysler’s closing will be on your head. Because Obama says so.
I’m not informed enough to really comment on the legal issues of this case, but anyone thinking that it’s just for the UAW and its unsecured interest in Chrysler to get a majority stake in the country while pension funds with secured investments in Chrysler get the short end of the stick is fooling themselves.
How Obama can get away with pushing such a shamelessly biased deal that’s so obviously tilted to the benefit of his political supporters at the UAW is beyond me. This whole thing stinks of Chicago-style politics.
