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All Hail New Chrysler!

In another body blow to our freedoms and U.S. contract law, the Supreme Court yesterday denied an appeal from Chrysler’s creditors to stop their bankruptcy deal, the terms of which allow the European motor company Fiat to purchase a portion of Chrysler, now to be called New Chrysler.

Supreme Court Justice Ruth Bader Ginsburg ordered a temporary stay in the bankruptcy proceedings in order for the court to possibly consider the terms of the deal.  Some of Chrysler’s creditors, most notably members of some Indiana pension funds, objected to the sale to Fiat and asked for a stay, arguing that bankruptcy protections were voided to rush the deal through.  The creditors who brought the appeal argued that they as secured creditors were given a lesser stake in the bankruptcy deal than the unsecured creditors, namely the United Auto Workers union.  In contract law, secured creditors receive preference over unsecured creditors.  However, the Obama administration’s meddling has now turned that portion of our law on its ear.  This is a huge blow to our financial freedoms and freedom in general.

This bankruptcy deal now calls into question any contract that gives secured creditor status to any financial institution, company, individual, etc., and will likely make it more difficult to conduct financial transactions.  Why would a financial instutition such as a bank want to enter into such a transaction now that they know lesser creditors may be able to move ahead of them in line in the case of a bankruptcy?

This deal smells highly of an Obama payback to the labor unions for their support of his Presidential campaign.  The problem is that this could end up costing the American people far more than just a political favor.


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