Bankruptcy

Nation of Laws?

By mcbride

The US Supreme Court allowed the Chrysler sale to proceed, thus granting the current administration?s plan for the company?s assets to be sold to Fiat.  (I still cannot wait to see how your local Chrysler service bay handles warranty work on a Fiat product, once they arrive.)  From the e mails and other information which was recently made public, it is clear that the government acted as those with power will act ? that is, pushing their agenda and controlling the process.  Another colloquial way of looking at it is to recognize that ?those with the gold rule? and in this instance the only person with money (albeit the recently minted kind) was the government.  One objection stood in the way of the sale proceeding as planned by the government and that was a charge led by a smart lawyer with some serious chutzpah, Tom Lauria.  Tom represented bondholders who argued that, according to the Bankruptcy Code?s priority scheme, they should have been paid in full before other parties were paid.  The government/Chrysler?s plan provided for a different priority plan, one where Tom?s clients were paid less than in full and those ?under? them in the Code?s payment system got value.  Commenting on the ruling by the Supremes, Tom was typically frank:  ?Thomas Lauria, a White & Case lawyer who led the legal challenge, said his experiences in the past month ?cause me to…directly raise the question as to whether our judiciary is today able to fulfill its constitutional mission, that is, to ensure that the rule of law prevails — particularly in the face of perceived crisis.?  Whoever is right, his question is a real one, are we going to follow the laws when faced with a crisis or not?  Whether the subject is the right of habeas corpus, the Geneva Convention and treatment of detainees or the provisions of the Bankruptcy Code, the question remains. 

 Here are some articles on today?s ruling: http://online.wsj.com/article/SB124453532783397365.html?mod=djemalertNEWS (subscription required) and http://www.bloomberg.com/apps/news?pid=20601085&sid=a59MFT3OCDBs (?Chrysler may begin selling the first Fiat vehicles in as little as 18 months, executives at both companies have said. The combined company will build a new car in the U.S. based on the mechanical underpinnings of Fiat?s Alfa Romeo 149 that hasn?t gone on sale yet.?)

Michael

Full post as published by Texas Lawyer Blog on June 10, 2009 (boomark / email).