Our assessment of the stay factors here is based on the record and proceedings in this case alone.
Supreme Court Justice Ruth Bader Ginsburg • In her four-paragraph decision in “Indiana State Police Pension Trust v. Chrysler LLC,” which was the main roadblock in the way of the Chrysler-Fiat sale. Why the wording? It’s likely they didn’t want to set a standard for any sort of GM sale. The decision, by the way, hinged on whether Chrysler was being discriminatory towards the pension program in its actions, which it wasn’t. Everyone’s getting screwed the same way. • source
Wow. That was unexpected. The one thing that could stop the Chrysler/Fiat sale just happened. Justice Ruth Bader Ginsburg delayed the sale “pending further order.” Three Indiana state pension and construction funds were among the foremost opponents of the sale, which they felt left them financially out of the loop. The final sale, which the bankrupt company was counting on, could be delayed for weeks while the court makes a decision. Stay tuned to this Spidey-station. source
“Issue a stay … please!” The Indiana pension fund group that holds a minority stake in Chrysler appealed to the high court to prevent the sale, on grounds that the sale is unconstitutional in that the rights of junior creditors are being placed above senior lenders. They also say the U.S. Treasury Department has overstepped its bounds with the sale.
Other pitfalls Beyond that, consumer groups also attempted to block the deal, moving through the judicial system so quickly that it hasn’t been committed to paper, because it would shield the new company from lawsuits and other problems with current Chrysler vehicles. The Supreme Court has the ball in their hands now. source
We have no choice. We’re all being called to sacrifice in order to build a strong, more viable GM. This is our last chance to get it right.
General Motors CEO Fritz Henderson • Regarding the need to cut dealerships at a Senate committee hearing today. Both GM and Chrysler are cutting enough dealerships that they’re going to screw small towns all over the country. Good for you guys. Jerks. • source
A speedy bankruptcy Chrysler, which has been trying to breeze through its bankruptcy as quickly as possible so it doesn’t lose its value in the meantime, got federal bankruptcy Judge Arthur Gonzalez to approve the sale of most assets to Fiat.
A needed merger In case you’re wondering why this sale happened so quickly, it’s because the Obama administration is putting its muscle behind it. They made it the centerpiece of the automotive task force’s recommended reconstruction plan.
Sticking pointsNot everyone’s behind this merger – among the scorned lovers include a number of auto dealerships about to lose their franchises, some pension funds in Indiana with a $42.5 million stake, suppliers and ex-employees. source
The fact simply is … our group has become too small to have a voice within the bankruptcy.
Stairway Capital Management • In a statement about leaving the small group of “Non-TARP Lenders,” which complicated Chrysler’s life and helped lead to their bankruptcy. Larger fund OppenheimerFunds Inc. also backed down, leaving a much smaller group of investors opposed to the Obama administration’s plan to restructure the automaker’s debt. • source