Bankruptcy

Once More, with Feeling

By Stephen Lubben

I've said before that I don't see how the absolute priority argument in Chrysler has legs, unless the senior creditors can show that Chrysler's assets are currently worth more than $2 billion.  There is no indication that the consideration going to the union -- which, notably, is not cash -- would be otherwise available to the seniors, so complaining about that seems like a waste of time.

But along comes several Indiana pension funds with a motion to appoint a trustee or examiner, and an objection to the sale, and a motion to withdraw the reference (arguing, among other things, that the proposed § 363 sales constitutes a "taking" in violation of the 5th Amendment), and a motion to stay the proceedings until the withdrawal motion is heard.

The papers are an interesting amusing read -- although a bit over the top and unexpected for an old line law firm like White & Case.  The court denied the request for an emergency stay this afternoon.

Full post as published by Credit Slips on May 20, 2009 (boomark / email).