Supreme Court Won't Block Chrysler Sale

[Purveyor]

Source: Associated Press

(06-09) 16:27 PDT WASHINGTON, (AP) --

The Supreme Court has cleared the way for Chrysler's sale to Fiat, turning down a last-ditch bid by opponents of the deal.

The court said late Tuesday it had rejected a plea to block the sale of most of Chrysler's assets to the Italian automaker. Chrysler, Fiat and the Obama administration had warned that the high court's intervention could have scuttled the sale.

A federal appeals court in New York had earlier approved the sale, but gave opponents until Monday afternoon to try to get the Supreme Court to intervene.

Justice Ruth Bader Ginsburg ordered a temporary delay just before a 4 p.m. deadline on Monday.

Now the court has freed the automakers to complete their deal.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/06/07/national/w024200D59.DTL

[bluestateguy]

1. This is the best possible (least bad) deal

nt

[Jack Bone]

2. Looks like I get to go back to work!

Rumor is we'll go back on the 29th...let's cross our fingers!!

[question everything]

5. Good luck. Hope more consumers can get loans to purchase

a car, which is really what matters.

[Abq_Sarah]

3. So I'm guessing "secured bonds"

Are no longer secure.

Good luck trying to sell future debt.

[DJ13]

6. The bonds in question were junk bonds

[Abq_Sarah]

7. No, they were not

They were secured bonds of the type purchased by pension plans.

[DJ13]

8. They were purchased for .43c on the dollar

Thats not a secured bond.

[Abq_Sarah]

10. What in the heck are you talking about?

The price doesn't determine if the debt is secured.

[No Elephants]

11. No, but the price may well indicate that the bonds are not secured, at least not

with assets that are worth anything, or that the position of the bondholders is not a good one for any one of a thousand or so other possible reasons.


It isn't as though no "secured" bondholder has been hurt in a bankruptcy before.

[Abq_Sarah]

13. I can't believe people here are jumping through

Hoops to justify screwing pension funds that bought secured bonds from Chrysler.

This would be akin to you selling your home and financing it yourself. When the buyer defaults, you would naturally go to the court to get YOUR property back because that's your legal right. Now what if the courts said... go screw yourself. We like this guy more than you so we're going to give him YOUR house and you can have 10K as compensation.

[No Elephants]

16. Kindly point out where I justified anything--and I fully understand the concept of

secured lending. However, I also know that understanding the basic concept of secured lending is from knowing enough to make a judgment about this specific case.

I also understand that things are not always straightforward. Sometimes documents are faulty. Sometimes the borrower has other valid defenses against the lender. Sometimes, the so called secured lender is not fully secured because the liguitdation value of the assets is less--sometimes far less--than the value of the debt. For instance, having a security interest in car parts and cars that are only 1/4 finished is not as "secure" as it may have seemed when the lender was looking to lend.

I don't know all the relevant facts in this case because I have not read the loan documents or the court papers, so I cannot comment specifically on this particular case with a high degree of intelligence, so I didn't attempt that.

My prior post was simply to say that assuming there is no connection between the the price at which a bond is selling and the above issues is often a faulty assumption. And your post indicated that you were not taking that into account at all.

[question everything]

4. Good News

When Obama first talked about the bankruptcy, he detailed how all other alternatives failed, including, and especially negotiating with the creditors.

At least, some employees will keep their jobs.

[The Croquist]

14. It may be good for employees today

but it's a disaster to investment from today forward and without investment there are no new jobs.

If "secured debt" is no longer secured interest rates will rise. I wouldn't invest in any corporate bond today. I don't care if they're AAA or junk. If the company goes belly up there is no guarantee that the collateral that was assigned to this debt will actually be mine. That makes it unsecured debt. When the government is running a trillion plus deficit I would think that this is a bad plan while you are trying to convince foreign investors to invest in the US.

Has anybody else noticed what's happening to the yield curve?

Venezuela here we come.

[blue_onyx]

9. Good

Hopefully Chrysler can now get on with becoming a stronger company. For the sake of the workers and my state, I hope everything goes well.

[dipsydoodle]

12. Inevitable outcome I think

n/t

[Wednesdays]

15. K&R

:kick: