http://www.washingtonpost.com/wp-dyn/content/article/2009/06/07/AR2009060702548.html
Quote:
Three Indiana state pension and construction funds late Saturday filed documents requesting that the sale be delayed so that the Supreme Court can hear their appeal. Two lower courts have already rejected the lenders' objections. On Friday, the U.S. Court of Appeals for the 2nd Circuit ruled the sale could go forward after 4 p.m. today or earlier if the Supreme Court declines to take up the case.
The Indiana funds' emergency application was made, under Supreme Court procedures, to Justice Ruth Bader Ginsburg, who oversees the 2nd circuit appeals court. Ginsburg could rule on her own or refer the matter to the high court.
The Indiana funds contend that the sale of most of Chrysler's assets to a new company -- to be jointly owned by Fiat, the United Auto Workers union and the U.S. and Canadian governments -- breaches numerous laws. For one, they argue, the process tramples on the funds' rights as senior lenders to Chrysler because they would recover less than junior lenders. The Indiana funds hold about $42 million of the $6.9 billion in secured loans. Under the agreement hammered out by the Obama administration with most of the first-lien lenders, the group would recover about $2 billion, or 29 cents on the dollar.
The funds also contend that the quick bankruptcy proceedings pursued by Chrysler and the Obama administration -- a federal bankruptcy judge approved the sale 32 days after the automaker filed for one of the largest bankruptcies in U.S. history -- did not comply with bankruptcy law. The Indiana funds are also arguing that the Treasury illegally used money from the federal Troubled Assets Relief Program, meant for financial institutions, to prop up Chrysler.
"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 Indiana funds wrote in their Supreme Court application.
Quote:
Three Indiana state pension and construction funds late Saturday filed documents requesting that the sale be delayed so that the Supreme Court can hear their appeal. Two lower courts have already rejected the lenders' objections. On Friday, the U.S. Court of Appeals for the 2nd Circuit ruled the sale could go forward after 4 p.m. today or earlier if the Supreme Court declines to take up the case.
The Indiana funds' emergency application was made, under Supreme Court procedures, to Justice Ruth Bader Ginsburg, who oversees the 2nd circuit appeals court. Ginsburg could rule on her own or refer the matter to the high court.
The Indiana funds contend that the sale of most of Chrysler's assets to a new company -- to be jointly owned by Fiat, the United Auto Workers union and the U.S. and Canadian governments -- breaches numerous laws. For one, they argue, the process tramples on the funds' rights as senior lenders to Chrysler because they would recover less than junior lenders. The Indiana funds hold about $42 million of the $6.9 billion in secured loans. Under the agreement hammered out by the Obama administration with most of the first-lien lenders, the group would recover about $2 billion, or 29 cents on the dollar.
The funds also contend that the quick bankruptcy proceedings pursued by Chrysler and the Obama administration -- a federal bankruptcy judge approved the sale 32 days after the automaker filed for one of the largest bankruptcies in U.S. history -- did not comply with bankruptcy law. The Indiana funds are also arguing that the Treasury illegally used money from the federal Troubled Assets Relief Program, meant for financial institutions, to prop up Chrysler.
"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 Indiana funds wrote in their Supreme Court application.
