I am not a fan of Supreme Court Justice Ruth Bader Ginsburg, but I have to give her credit for issuing a temporary stay in the bankruptcy deal between Fiat and Chrysler. From the beginning, the bankruptcy filing of Chrysler has stunk to high heaven. The President publicly rebuked bondholders who held out on the final deal, but in reality the President should have supported the bondholders who were obligated to receive one hundred cents on the dollar instead of the paltry amount they have been offered which is much lower than that offered to the United Auto Workers Union which should have been last on the rung to receive anything.
Indiana pension holders decided that they would not accept this deal and the State Treasurer has done something about it which has now gone all the way to the federal Supreme Court. The emergency stay only lasts until this afternoon, but Ginsburg could issue another stay or the SCOTUS could decide to hear the case, which they must as this deal threatens the rule of law and would set a bad precedent. This deal has been pressed by the Obama administration and yesterday they warned the SCOTUS not to interfere. The power really is going to Obama’s head. Indiana’s state lawyers say the Chrysler deal allows government-favored unions to gain at the expense of bondholders and also breaks the rules used in bankruptcy cases. The lawyers stated in the emergency appeal that “the public is watching and needs to see that, particularly when the system is under stress, the rule of law will be honored and an independent judiciary will properly scrutinize the actions of the massively powerful executive branch.”
The Indiana pension funds have about $42 million invested in Chrysler which is not big money when discussing billions, but this does shed some light on the power brokering the government is doing in the realm of private industry. As the appeal states, the SCOTUS needs to decide “whether the law permits such wholesale alteration of bankruptcy law, not to mention the American capital markets, by the executive branch of the U.S. government acting beyond the color of congressional authority.” The American people have already decided just what power is rendered to the executive branch by the Constitution and that power is far more limited than the places the President has gone and it must be stopped. The SCOTUS must stand up for the American people and most importantly, stand up for the Constitution!