Rebel Traders – Analysis Without The Hype

Breaking News:

The United States Supreme Court will NOT take the case to the full court for open hearings. The following is the Supreme Court order released moments ago.

It looks as if the ‘rule of law’ has been considered a ‘non issue’. This is very dangerous going forward for other companies who need or want to sell bonds for the purpose of raising capital.

From a personal point of view I am very disappointed that the Supreme Court has made this decision.

Breaking News—

Supreme Court Justice Ruth Bader Ginsburg put a temporary hold Monday on the deal to sell Chrysler to save it from collapse.  Her order, however, simply gives her or the full Court more time to ponder whether to postpone the sale further, or allow it to go forward.  The order can be found here.

It would have taken the votes of five members of the Court to grant a full postponement.  Ginsburg’s brief, unexplained order said only that the bankruptcy court’s decisions approving the sale were “stayed pending further order” by her or the Court.

The Justice acted just minutes before a 4 p.m. deadline that the Second Circuit Court had set last Friday. At that hour, a delay ordered by the Circuit Court expired.  If Ginsburg had not acted, the sale would have been cleared under the terms of the lower court’s order.

The action had almost no legal significance, however.  The deal remains in legal limbo until Ginsburg, as the Circuit Justice, or the full Court takes some definitive action.

Among the likely explanations for her action:

* Ginsburg may have decided to share the decision on what to do with her eight colleagues, and they needed more time to think or talk about it.

* Members of the Court may have decided that they wanted to give some explanation, or perhaps some may have decided to dissent and wanted a chance to prepare a statement saying so.  In the meantime, it was her task, as the Circuit Justice, to impose a limited stay.

* Ginsburg or the Court may be waiting to see how the Second Circuit explains its decision to uphold the terms of the sale.  The Circuit Court issued no opinion on Friday, indicating that such an explanation would come “in due course,” although the expectation was that one or more opinions would emerge from those judges on Monday.

The wording of Ginsburg’s order — “stayed pending further order” — is the conventional way by which a Justice or the Court carries out an action that is expected to be short term in duration, and not controlling — or even hinting at — the ultimate outcome.  Any speculation that her order meant the Court was leaning toward a further postponement would be unfounded.

The Circuit Court had given Ginsburg no option other than the one she chose if she wanted more time for herself or the Court to consider a large stack of filings for and against the idea of delaying the deal.  Those papers began arriving at the Court electronically shortly before midnight Saturday and continued up until shortly before 10 a.m. Monday.  Court aides worked through the weekend gather them and get them ready for action, although Ginsburg herself may have begun studying them.

In the forms used by the lawyers seeking delay, the applications were considered emergency matters for the action of a Circuit Justice — that is, an individual member of the Court assigned to deal with such temporary matters from a specific geographic federal Circuit. Source: Supreme Court of the U.S. Blog

Thank goodness is all I have to say. I hope the rule of law will prevail and the Government will not be able to circumvent the laws any longer in this matter. I hope this goes to the full Supreme Court for a formal hearing.

The paperwork is piling up at the United States Supreme Court on the matter of the Chrysler bankruptcy. Recall that the the primary issue at hand is the bondholders are not receiving fair treatment under the bankruptcy proceedings. It is argued that certain bankruptcy laws are being broken and bondholders are being given a bum deal (to which I agree).

I present three documents for your reading pleasure, the first is the application for stay filed by the Indiana Pension Trust (bondholders), and the following two are responses from Chrysler and Creditors.

A group of bond holders that are a part of pension funds in the state if Indiana have appealed to the high court for a hearing.

WASHINGTON — A group of Indiana pension funds opposed to Chrysler LLC’s sale to Fiat SpA filed an emergency appeal with the U.S. Supreme Court to stay the sale while they continue their attempts to block it.

The emergency stay request, filed shortly before midnight Saturday, came after the 2nd U.S. Circuit Court of Appeals in New York approved the acquisition of most of Chrysler’s assets by a group led by Fiat, the Italian auto manufacturer. A U.S. bankruptcy judge early last week approved the sale. A coalition of consumer groups lodged a separate stay request early Sunday morning, arguing the sale terms applied to the deal would wrongly shield the new company from injury lawsuits involving current Chrysler vehicles.

The stay requests asks for the extension of a temporary hold on the sale put in place by the appeals court until Monday at 4 p.m. EDT or when the high court decides whether to intervene.

“Absent a stay, the court will be deprived of the opportunity to decide critical, nationally significant legal issues relating to management of the economy by the United States government,” the pension funds said in their stay application.

“Chrysler bankruptcy carries profound implications for the Nation’s economy. Nearly everyone will feel the impact,” the funds added.[...]

The Indiana pension funds have argued the sale is unconstitutional because it puts the rights of junior creditors ahead of the rights of senior lenders. The funds also argue the U.S. Treasury Department has overstepped authority given to it by Congress under the Troubled Asset Relief Program by financing Chrysler’s restructuring.[...]

I for one hope that the the Supreme Court will decide to hear this case and not simply send it back down with no opinion.

The rule of law concerning the bond holders is paramount and critically important going forward for all business dealings in this nation.