Indiana Pensioners Using Goverment's Argument Against It

As Zero Hedge expected in Tuesday's Frontrunning, it was only a matter of time before White & Case picked up on Fiat spokesperson Gualberto Ranieri's words, after he said "Fiat won't walk away from Chrysler." As has been repeatedly noted, the key argument presented by Chrysler and the USA, is that Fiat would bail if it had a chance. Of course, with Opel out of the consolidated picture, in my opinion, Fiat's walking away is still a distinct possibility, however now that the nitpicking over words has really picked up steam, a word out of place could be the difference between victory and loss.

And indeed, a few minutes ago, the Indiana Pensioners filed a Supplemental Statement in Support Of Stay Application (below), in which they state:

In responding to the news of this Court’s temporary stay, Sergio Marchionne, the CEO of Fiat, was quoted as follows:

“‘We would never walk away,’ Marchionne said in response to a question about whether Fiat would pull out of the deal if it isn’t completed by the June 15 deadline. ‘Never.’” Rather, Marchionne said that “We should just be patient and let the system work.”

Whether or not the arguments and testimony were ever true, the Indiana Pensioners respectfully submit that the risk of termination by Fiat if the transaction does not close by June 15 no longer provides a basis for driving the timing of these proceedings.

It is ironic, that Fiat itself could have dealt a big blow to its own case, if indeed it was truly interested in acquiring Chrysler. The SCOTUS will now have to start dealing with this angle, which for all practical purposes, weakens the debtor's case for an accelerated emergence dramatically.

Comments

[jadziasman:]

A greater irony would be if (when) Chrysler is liquidated. The Indiana pensioners would realize a greater loss in their investment and perhaps state goverment job losses due to decreased economic activity resulting from the domino effect on Chrysler's supply chain.

Principles sometimes cost you principal.

Jun 09 04:42 PM

[speeddaimon:]

"Principles sometimes cost you principal. "

In this case it seems worth it though. At some point don't we all have to take a stand and say "this is wrong, it should change" even if it costs us money? Maybe someone needs to be looking toward the interests of what is the right thing to do instead of always looking for the angle that nets the most or loses the least for an individual. Quite frankly, I think the spontaneous rewriting of established bankruptcy law is one of those cases.

Jun 09 05:02 PM

[yellowhoard:]

This isn't about a few thousand retired people in Indiana.

This is about the rule of law.

If the court rules that the bond holders can be screwed our entire financial system will collapse.

The union workers that were placed by the White House in front of the bond holders owed their very jobs to those who invested in Chrysler bonds.

If the White House prevails, who will ever buy a bond in a unionized company again?

Jun 09 05:07 PM

[doubleguns:]

Every thing corupt the govt tries to RUSH it through.

Its that obvious and that simple.

They are trying to get it past you when you blink. The light of day might bring questions.

Anyone remember the first TARP that had to be done within the week. 100 billion of it remains unspent still. PURE B/S is what that was to get 150 bil for the congress tacked onto the 700 bil.

Anyone else remember this? We need to!!!

If its a rush job in wash its corupt.

Jun 09 06:08 PM

[carbonblack:]

Well the our black robed priests just nailed contract law to the wall.
www.scotusblog.com/wp/...
I don't give the economy a chance for the next decade at least.

Jun 09 08:10 PM

[punk_ash:]

The only ones to make the concessions should be the Union and the states where these companies are, its only fair that way.

We know Michigan is broke. That leaves us with the UAW and they want more and more and more.

Does someone realize that after these companies emerge from bankruptcy, no one will buy their equity or debt if the debt holders are pushed aside. This is a bigger problem than a company or some debt holders or some Indiana retirees. Its about the rule of law.

I just hope that the debt holders are given a fair share, and Chrysler still is able to get back on its feet.

Jun 10 02:37 AM

[kkong:]

This isn't about JUST a few thousand retired people in Indiana.

For one thing, it's about every public servant in Indiana, including every employee of the State, plus and every employee of every city, county, and school board which subscribes to the Indiana Pension Fund. That includes people like your city police, firefighters, librarians, sewer workers, drinking water system workers, roadway engineers and even mayors and councilmen, plus your kids' schoolteachers, school bus drivers and school janitors, and on and on and on. Every one of these employees contributes a portion of every paycheck (no, it might no be "withheld" like Federal Income Tax, but it's still a contribution, in that the CONTRACT between the employee and the employing State agency, city, county, or school board includes it) to the Indiana Pension Fund. That's right. Because any government employee worth his salt, and there are many, could make more money in industry. I did. But he chooses to work for government (just like POTUS and SCOTUS) maybe partly because he is a citizenship-minded individual, but definitely because he can (or used to be able to) count on a pension if he is able to survive the political landmine field until he reaches age 62 or 65. And every one of these employees just had a sizeable portion of those contributions "disappeared" by POTUS and SCOTUS.

The result is obvious. Fewer good people will go to work for the State and its cities, counties, and school boards. But those jobs will still be filled. But by whom? People who couldn't get a job in industry? People who can hardly read? People who know they can't count on that Pension At The End Of The Rainbow anymore, and therefore apply a "Mexican" attitude toward their jobs, doing as little as possible, attending instead to small businesses on the side, looking for bribes and "tips"? Even, as is the case sometimes in Mexico, holding someone or something for ransom now and then, to acquire cold hard cash that they KNOW they can hold onto for their retirement fund?

That is, could this decision by POTUS and SCOTUS be a giant step toward "Mexification" of our State and local government employees, and our interactions with them?

So, what I want to know is, WHO at the State of Indiana let this happen? Is the charismatic Governor one of the "Trustees" of the Indiana Pension Fund? Did those "Trustees" turn blind eyes, or even wink, as the Fund loaded up on Chrysler bonds, heading into "The Great Recession"? Will the Trustees now claim that they never heard of "buyer beware", that they are naively innocent of the financial facts-of-life dealing with Las Vegas of Wall Street? What will they say to their local policemen and firefighters, to their neighbors' kids' schoolteachers, et al, when those folks ask them WHY they chose THOSE "investments"? Did they happen to do the same thing with Enron stock when Enron insiders were unloading it to hapless government employees of various agencies, States, and etc.? Have they received any campaign contributions from Wall Street bankers, and will they in the future receive any such campaign contributions?

Lastly, it isn't JUST about Indiana Pension Fund members, either.
Every other State is endangered by legal precedent.

Jun 10 08:58 AM

[Blackeyebart:]

You guys are weird. Obama didn't wake up one day and say "let's screw the GM bond holders". The US Auto Industry has been involved in an slow-motion car-wreck for forty years.

After the unions, the workers, the management, the designers, the directors, the investors, the bond holders, the dealers, the subcontractors and Jack's brother have failed to sort GM's problems, they all turned to the government and said "Fix this." Then they bitch about how unfair it all is. Don't forget you are volunteers.

And no-one will invest in a Union run company ever again? At the first sign of "green-shoots" investors will rush in holding their technical noses.

Jun 11 12:39 AM