ustice Ruth Bader Ginsburg wasn't trying to kill the sale of Chrysler to Italy's Fiat when she halted it minutes before a 4 p.m. deadline Monday, said Lyle Denniston in SCOTUSblog. Her one-sentence stay merely postpones the sale until she, or the full court, decides whether Indiana pension funds have a right to challenge the deal. But Fiat can walk away June 15, sending Chrysler into liquidation, so the justices have "some incentive" to act quickly.
The pension funds' case has two parts, said Matthew DeBord in Slate's The Big Money. First, they say that the Obama team didn't have the legal right to use bank bailout funds on Chrysler. Then they argue that they're unfairly being forced to accept 29 cents on every dollar of secured debt they paid 43 cents for less than a year ago—"let's hope Justice Ginsburg agrees" that this second point is mostly "political face-saving" by pension fund managers who made "some stupid risk bets."
Actually, the fact that the Supreme Court is taking a look at the case "is good for capitalism—not to mention democracy," said Rob Cox and Richard Beales in BreakingViews. The "railroading of secured lenders by the White House" may have a good motive—a rapid restructuring could save Chrysler, for the greater economic good—but it raises "troubling questions" about the rights of creditors and challenges years of established bankruptcy law.
The outcome of Ginsburg's stay is uncertain, said Douglas McIntyre in 24/7 Wall Street, but this is almost certainly not the last challenge the Supreme Court will get to "the attempts by Congress and the administration to pull the wings off the fly of the banking system and car industry." And all it would take is "modest success" before the court by one "aggrieved party" to start an avalanche of lawsuits. The Obama administration, and GM, would be right to be worried.
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