Chrysler, Obama and the law

Deal Book has an excellent post on the legal issue being fought out before the Supreme Court in the Chrysler bankruptcy. At stake: our Constitution’s protection for creditors vs. the political desire to reward labor unions. The author hints that the Court may let the deal proceed while examining the issue at its leisure, since Fiat doesn’t really have any concern here – they’ll get the company either way, either with the union placated or the creditors. This hunch is supported by Fiat’s announcement today that they still want to go through with the deal, regardless of the Supreme Court’s review. I think the Constitution wins this one.

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3 responses to “Chrysler, Obama and the law

  1. Paco

    “At stake: our Constitution’s protection for creditors vs. the political desire to reward labor unions.”

    It’s sadly amazing how many supposedly well informed people aren’t aware of the importance of this issue. The seeming lawlessness of the Obama administration in subverting (200 years of?) bankruptcy law for political expediency is, as BHO himself sometimes phrases things, “troubling” (to the 10th power, IMO).

    Emerging market bonds (up 12-15% YTD) look better to me all the time. Those folks have a healthy respect for lender rights because they know that if they ever stiff creditors then nobody will lend any more money to them. Hope the U.S. doesn’t learn this the hard way.

    • christopherfountain

      Paco, one of Russia’s biggest problems in grwoing its ecnomy is the absence of the rule of law. Same with South American banana republics. When contracts are nullified and private property is confiscated, people with money flee. We used to know this in our country and took pride in being different. Now, we’re outdoing them. And you’re right – no one seems to give a damn or even notices what’s going down.

  2. Towny

    they notice……but they also know there is nothing they can do about…..except of course raise a militia.