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SCOTUS orders dismissal for Chrysler case

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The U.S. Supreme Court took a look at Chrysler's bankruptcy, but decided that the issue is moot and remanded it to the 2nd Circuit Court of Appeals with instructions to dismiss the case.

In September, three Indiana pension and construction funds asked the nation's highest court to reconsider their objections to the Chrysler bankruptcy proceedings that earlier this year resulted in the sale of most of the American automaker's assets to an Italian company.

The case of In re: Chrysler LLC, Debtor, Indiana State Police Pension Trust, et al., v. Chrysler LLC, et al., No. 09-285, centered on the bankruptcy of Chrysler. Indiana officials claimed the sale to Italian company Fiat unfairly favored Chrysler's unsecured stakeholders like the United Auto Workers ahead of the secured debt holders like the pension funds.

At a minimum, Indiana's funds lost $6 million in value during the bankruptcy sale, according to the state treasurer's office.

The Indiana State Police Pension Trust, Indiana State Teachers Retirement Fund, and the Indiana Major Moves Construction Fund joined together to request certiorari, asking the justices to decide whether bankruptcy proceedings similar to Chrysler should be allowed in the future. The court initially stayed the bankruptcy sale in June but then allowed it to proceed. That move to block the automaker's sale came after the 2nd Circuit Court of Appeals in New York had given it the green light. At the time, the high court did not consider the merits of the opponents' arguments and left the door open for this certiorari request.

The question presented is whether Section 363 of the bankruptcy code may freely be used as a "side door" to reorganize a debtor's financial affairs without adherence to the creditor protections provided by the Chapter 11 plan-confirmation process.

A paragraph-long summary disposition order was issued today, following the justices' final conference of the year Friday. Justices granted certiorari but dismissed the case.

"The judgment is vacated, and the case is remanded ... with instructions to dismiss the appeal as moot," the order says, citing the precedent of United States v. Munsingwear Inc., 340 U.S. 36 (1950). That case from the 8th Circuit Court of Appeals involved price-fixing claims, and the Supreme Court held that the established practice of dealing with an appeal that becomes moot while pending review is to reverse or vacate the judgment and direct that it be dismissed.

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  1. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  2. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

  3. I will agree with that as soon as law schools stop lying to prospective students about salaries and employment opportunities in the legal profession. There is no defense to the fraudulent numbers first year salaries they post to mislead people into going to law school.

  4. The sad thing is that no fish were thrown overboard The "greenhorn" who had never fished before those 5 days was interrogated for over 4 hours by 5 officers until his statement was illicited, "I don't want to go to prison....." The truth is that these fish were measured frozen off shore and thawed on shore. The FWC (state) officer did not know fish shrink, so the only reason that these fish could be bigger was a swap. There is no difference between a 19 1/2 fish or 19 3/4 fish, short fish is short fish, the ticket was written. In addition the FWC officer testified at trial, he does not measure fish in accordance with federal law. There was a document prepared by the FWC expert that said yes, fish shrink and if these had been measured correctly they averaged over 20 inches (offshore frozen). This was a smoke and mirror prosecution.

  5. I love this, Dave! Many congrats to you! We've come a long way from studying for the bar together! :)

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