Today the Supreme Court of The United States (SCOTUS) stopped a quick sale of Chrysler assets to Fiat.  Two lower courts had already approved the sale of Chrysler’s assets to Fiat and had even approved shortening the normal stay of the sale from ten days to four days.

Individuals and businesses don’t enter into bankruptcy lightly.  Bankruptcy is a last ditch effort to keep from losing everything or going completely out of business with creditors walking off with everything.  Chrysler’s bankruptcy is no different than others.

According to the The New York Times,  no one expected Ruth Bader Ginsberg, who hears emergency matters for the Supreme Court, would delay the sale.  With a one sentence opinion, Justice Ginsburg stopped the sale of Chrysler to Fiat until she or the rest of the Court say differently.

The company that will exit bankruptcy will be a very different entity than the one that entered bankruptcy.  If the sale goes through, the emerging company will be owned by an odd group, 55 percent will belong to a union retiree trust, 20 percent will be owned by Fiat (that 20 percent could eventually become 35 percent) and both the United States and Canada would have minority shares.

The groups that appealed to the Supreme Court, are three Indiana state funds and several consumer groups.  All of them are upset that they won’t get a bigger cut of broken up Chrysler.  Some of which have called the application of bailout funds to Chrysler illegal.

While clambering for more money, these groups fail to realize that if they delay the sale long enough no one will get anything.  Chrysler will be defunct like the Studebaker.

Car companies in America have failed in the past and can fail today leaving nothing for anyone to get.  Continuing to tie up the sale may leave the objectors happy to have won but with nothing for them to get.

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Entry was posted on Monday, June 8th, 2009 at 7:48 pm under Auto, Legal.

Read more entries by Susan Wilson.
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