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SCOTUS, Chrysler, Bond Holders, And Bankruptcy

Lee Cary over at American Thinker [1]:

In a one sentence order, Justice Ginsburg left open the possibility that the SCOTUS may scotch the Chrysler-Fiat deal that gives 29 cents on the dollar to the Indiana Fund and other Chrysler bondholders.

Judge Ruth Bader Ginsburg’s Order read [2] as follow:

“UPON CONSIDERATION of the application of counsel for the applicants, and the responses filed thereto, IT IS ORDERED that the orders of the Bankruptcy Court for the Southern District of New York, case No. 09-50002, dated May 31 and June 1, 2009, are stayed pending further order of the undersigned or of the Court.”

So, what does this mean?  According [3] to scotusblog.com,


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. There is now no timetable for further action at the Supreme Court, although the terms of the deal allow Chrysler’s new business spouse — Fiat, the Italian automaker — to back out as of next Monday if the deal has not closed.  Moreover, the papers filed in the Supreme Court have suggested that Chrysler is losing money at the rate of $100 million a day, pending the sale. That gives the Justices some incentive not to let much time pass before acting.

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.

 It strikes me as interesting that the order should come from, arguably, the most liberal member on the court, though what that means to the ultimate outcome of this thing, I don’t know.  Likely not much. penstar-logo [4]Ginsberg strikes me as the least likely candidate for an FDR -era style judicuial frontal assault on Obama’s agandae, though stranger things have happened.   And no, I don’t think this is an action of her initiation. She wouldn’t be acting at all, I suppose, but for suits going through the lower courts, specifically, circuit courts in NY.  Rather, she was forced to act based on their actions.

However that may be, the order wouldn’t have been issued at all, if the thing wasn’t at least being altered, I should think.  The only way that wouldn’t be true is if someone had ideas in their head about intentionally scotching the deal with Fiat… which is also always a possibility, of course. Given that Monday deadline, whatever happens here is going to happen quickly.

Remember though, in your specualtion that all Ginsberg actually ruled on here was the stay, pending a grant of cert which would allow the case to be heard by the USSC.