A Win for Indiana and the Rule of Law
Last week in a post titled “The End of Capitalism as We Know It,” I wrote about Chrysler’s bankruptcy and its implications for the rule of law and our capitalist system. Though several other blogs linked to the post, the issue itself remains far off the radar of the national press; few people seem to be talking about it. I understand that the intricacies of bankruptcy law are boring and not very conducive for concise sound bites on the evening news, but this really is an issue with significant implications. Simply put, political convenience is being placed ahead of long standing laws and capitalist foundations . . . on an enormous scale.
Unfortunately, though millions of people are implicated by the government’s plans in Chrysler, only the State of Indiana sued to stop it and ensure the rule of law governed the proceedings. The District Court dismissed Indiana’s suit but the United States Court of Appeals for the Second Circuit in New York City has now granted a stay. Brian Howey reports:
The scheduled bankruptcy sale of Chrysler, LLC originally set for Friday, June 5, 2009, at noon will not occur. The US Court of Appeals for the Second Circuit has agreed to hear legal arguments…The Indiana appeal centers on three “fundamental” points: The secured creditors, such as the Indiana funds, have been made secondary to unsecured creditors in contravention of longstanding bankruptcy law; The federal government has illegally used TARP funds to leverage this sale because the United States (US) Congress intended TARP funds to solely be used to aid “financial institutions.” And the government’s plan constitutes an illegal “sub rosa” plan and not an arm’s length transaction.
8 Responses to “A Win for Indiana and the Rule of Law”
This is excellent news. If Indiana prevails in its suit, perhaps it should change its motto from “The Crossroads to America” to “Defender of Capitalism and the Rule of Law.”
[...] and the Chrysler Bankruptcy By Doug Some of my fellow Hoosier bloggers (h/t Abdul and Josh Claybourn) have been following the Chrysler bankruptcy, particularly with respect to Indiana’s [...]
[...] Indiana muscles in on the Administrations illegal car company moves. [...]
[...] Indiana muscles in on the Administrations illegal car company moves. [...]
And now the SC may take a swing at bat. Who would have thought that Ginsburg would stand up for the rule of law?
A review of the procedure (on which their later decision was apparently based) will reveal a crock. Theft in all of its versions isn’t pretty but seems to be the basis of our government. As I recall, Greenspan has never retracted his view that all taxation is theft.
This appeared in the Washington Post today.
“And let’s not forget Richard Mourdock, the crusading Indiana state treasurer, who took his challenge of the Chrysler bankruptcy deal all the way to the U.S. Supreme Court.
Several years ago a number of Indiana’s state pension funds decided to invest $17 million in Chrysler debt at what looked to be the bargain price of 43 cents on the dollar. Unfortunately, things didn’t work out and Chrysler slipped into bankruptcy court, where Indiana was offered $12.2 million as part of a final settlement of its claim. That was only $1.5 million less than Mourdock had previously said he was willing to accept, but for reasons that are still unexplained, he was suddenly seized with an overwhelming sense of fiduciary duty and constitutional responsibility — so much so that he was willing to spend another $2 million of his pensioners’ money to hire a fancy Wall Street law firm and pursue his quixotic legal challenge. If he had succeeded and forced Chrysler into liquidation, it would have almost surely cost many hundreds of lost jobs at Indiana factories and dealerships and millions of dollars of lost revenues for the Hoosier state.
Every crisis generates its own set of leaders willing to take risks, twist arms and even bend a few rules to get us through it. Every crisis also generates its own set of political ankle-biters. It’s not hard to tell the two apart. “
Balta, did you post that because you actually agree with this hack?
All the complaining about the Indiana challenge putting the Chrysler deal at risk of falling through is bogus. It ignores the fact that if the Obama administration had followed the law in the first place–rather than give the auto unions an unlawful advantage over senior creditors–it would not have been necessary for Indiana to sue.
It’s sort of like someone suckerpunching someone else, and then accusing the other person of starting a fight if they punch back.