Fiat-Chrysler deal clears Supreme Court; good news for workers and dealers
After all the surprise yesterday when the Supreme Court decided not to rubber stamp the approval of Fiat's acquisition of Chrysler, we now have a jolt of joy -- the Supreme Court took a little time to contemplate the arguments of the Indiana pension funds and decided to approve the deal.
Those who were hoping that a couple of pension funds holding $14.2 million of senior debt that they bought at 43 cents on the dollar last July would hold up the government's $8 billion effort to keep Chrysler from a liquidation must be deeply disappointed. Of course I have not heard these same voices wailing and gnashing their teeth about the $12.8 trillion the U.S. spent to bail out Wall Street.
Why did the Court reject the Indiana pension funds' plea? Its unsigned statement explained that to obtain a delay, or stay, someone must show that at least four of the nine justices find that the issue raised is serious enough to warrant hearing a full appeal and that a majority of the court will conclude the lower court decision was wrong. The Court said, "The applicants have not carried that burden."
I thought the Court would turn down the appeal when I posted on Sunday -- but I was shocked that the Supreme Court did not reach this conclusion on Monday. And now I know a little more about what it takes to get the Supreme Court to reverse the conclusion of an Appeals court.
Meanwhile, this is good news for Chrysler workers and dealers who will not be out of work -- assuming the Fiat deal closes this week. And it also bodes well for resolving the GM bankruptcy, which is structured in a similar way.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book isYou Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.