Eleventh hour stay of execution

Monday the Supreme Court granted a stay of the Chrysler bankruptcy court’s order approving the “sale” of Chrysler to Fiat.  In layman’s terms, that means no “sale” will occur until the Supreme Court says so.

The case arrived at the Supreme Court because the Attorney General of Indiana filed an appeal on behalf of three  Indiana pension funds who will lose $6 million if the “sale” is approved.  Each of these funds lent money to Chrysler, and, in return for their loan, they received a secured lien on the assets of Chrysler.  In case of bankruptcy, a secured lien means that the secured creditor, i.e., the Indiana pension funds, would be the first to be paid.  The government’s plan in the Chrysler bankruptcy, however, put the the secured creditors last.

As a matter of law, that is wrong.

I have no idea whether the Supreme Court will hear this case.  The stay is only in place temporarily.  If the Supreme Court decides not to hear the appeal, the stay will be lifted, meaning the “sale” will go through, and, the three Indiana pension funds will have to look elsewhere to make up this $6 million loss.

But, here is what disturbed me most.  The Solicitor General, the chief attorney for the government in Supreme Court cases, filed a brief opposing the stay.  The Solicitor General argued that,

the losses to the Indiana funds “cannot outweigh” the potential broader problems a collapse of Chrysler would present.

Accepting that argument is the judicial equivalent of  embracing Marxism.  And, according to that argument, the law matters not if it gets in the way of the “greater good”.

So, what laws can we be assured of, and for how long?

According to the Solicitor General, apparently not many, particularly if they get in the way of the “greater good”.

 I saw this in today’s USA Today, and just had to add it to my post.

Rep. Joe Donnelly, D-Ind., said he remains “very hopeful” the sale will be approved. Chrysler has three plants employing about 5,000 workers in his district. “There’s been no indication that the pension funds have suffered any damage,” he said.

Huh?  Perhaps Mr. Donnelly should speak with the Attorney General of his own state.

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The Sound Off Sister was an Assistant United States Attorney for the Southern District of Florida, and special trial attorney for the Department of Justice, Criminal Division; a partner in the Florida law firm of Shutts & Bowen, and an adjunct professor at the University of Miami, School of Law. The Sound Off Sister offers frequent commentary concerning legislation making its way through Congress, including the health reform legislation passed in early 2010.


  1. Dimsdale on June 9, 2009 at 4:32 am

    So somebody actually took a look at one of the Obamacrocks before it passed (quickly!  Or all is lost!) and found it to be (to be kind) wanting?

    Now if we could just get some group to look at the so called Stimulus Bill a bit more critically and actually report about it.  I dunno, maybe the media?  OUCH!  Sorry!  That was the sound of me slapping myself back to reality…

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