You could be right but I would have to see the transcript of the testimony. It depends on what he was asked. If he was asked about bids during the period that old Chrysler has been in bankruptcy, his testimony would be correct. The higher bid occurred before the bankruptcy when the management were under the now mistaken impression that the Viper Enterprise was worth more than $35 million. As you may recall, at the beginning of the bankruptcy filing an economic analysis of old Chrysler was filed showing a liquidation value of the Viper Enterprise ( if I recall correctly) of $41 million dollars. So refusing a bid of $35 million made when that bid was made certainly made sense at the time even if it proved to be an incorrect decision later.
New Chrysler Owns the Viper - See Below
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You could be right but I would have to see the transcript of the testimony. It depends on what he was asked. If he was asked about bids during the period that old Chrysler has been in bankruptcy, his testimony would be correct. The higher bid occurred before the bankruptcy when the management were under the now mistaken impression that the Viper Enterprise was worth more than $35 million. As you may recall, at the beginning of the bankruptcy filing an economic analysis of old Chrysler was filed showing a liquidation value of the Viper Enterprise ( if I recall correctly) of $41 million dollars. So refusing a bid of $35 million made when that bid was made certainly made sense at the time even if it proved to be an incorrect decision later.
For some time now I figured that the management of the Viper Team would put together an employee buyout of the Viper program. Similar to what Harley Davidson did years ago with great success.
When I read GK's posts he seems to be referring to that type of arrangement.
When I read GK's posts he seems to be referring to that type of arrangement.
CarDude
Enthusiast
The 06 was a flop because the coupe had been missing from the Viper line since the GTS was killed in 2002. Even after that long a period it was not a sell out in its debut year (see 2009 ZR1 sales and current prices - even in this economy)...sales were so sluggish that they went to work on a new Viper (Gen IV) in 2007, make no 2007; leaving time, in 2007, to sell the left-overs.
If there was an offer of $35M to acquire the Viper before the BK then why didn't the buyer show up in court with the offer? 
Unless I'm missing something, I thought the parties interested in acquiring the Viper needed to file with the court.
Unless I'm missing something, I thought the parties interested in acquiring the Viper needed to file with the court.
The orders be open!!!!
Get your orders in let's keep this baby running.
Bill P
Woodhouse
Get your orders in let's keep this baby running.
Bill P
Woodhouse
Wow! That's good news!The orders be open!!!!
Get your orders in let's keep this baby running.
Bill P
Woodhouse
Take a step back, and witness what experts are worried about:
The usurpation of the bankruptcy process is disturbing, says Michael E. Levine, a distinguished research scholar at NYU's School of Law who has long advocated for GM bankruptcy. "This is not what I had in mind," says Levine, who notes that the bankruptcy code requires treatment that is "fair and equitable to all parties" -- a precedent he says is subverted by the government acting as a "third party reorganizing according to its own political preferences."
From
OBAMA'S JALOPY CO. - New York Post
When experts "all over the place" are concerned, I am concerned and so should you.
The orders be open!!!!
Get your orders in let's keep this baby running.
Bill P
Woodhouse
Great news Bill!
When does CAAP restart?
NHL2133
Enthusiast
The Dodge Viper, what else? Dodge will still be around after the BK thing is over, so why wouldn't the Viper still be under the Dodge name?
Well the appeal has come and gone without a judgement for Indiana or a reversal. The sale has been placed on hold through Monday to allow the pensioners to appeal to one level higher. Hardly a success. After how many failed appeals on the grounds stated do they need before you capitulate and let it go. It is not against the rule of law. Only a few peoples incorrect interpretation of it.
Chrysler Appeals Court Refuses to Block Sale to Fiat (Update2)
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By Tiffany Kary and David Glovin
June 5 (Bloomberg) -- A U.S. Appeals Court panel refused to block Chrysler LLC’s planned sale of its best assets to a group led by Italy’s Fiat SpA, and a group of creditors opposing the transaction said they would appeal to the U.S. Supreme Court.
The panel delayed the Chrysler sale until 4 p.m. on Monday, June 8, or until the Supreme Court says the sale shouldn’t be delayed. The judges affirmed the decision of the U.S. Bankruptcy Court, which said the only alternative to the sale was liquidation of the company.
The ruling may allow the new Chrysler to save 38,500 jobs and more at its suppliers, as well as permitting the carmaker to transfer its Jeep, Chrysler and Dodge brands to a new company stripped of most debt so it can be competitive in world markets. It may also benefit General Motors Corp., which plans a similar quick spinoff of its assets, for the same reasons.
“The affirmance does set a precedent that the structure of this quick sale is acceptable, and that will help GM and discourage appeals,” said Seton Hall University bankruptcy law professor Stephen Lubben in an interview after the hearing.
A creditor bid for Supreme Court intervention would likely go first to Justice Ruth Bader Ginsburg, who handles emergency matters from the New York-based federal appeals court that ruled today. She could act on her own or refer the request to the full nine-member court.
Monday Deadline
The votes of at least four of the nine justices are required for the court to consider the appeal. If the Supreme Court doesn’t act by 4 p.m. on Monday, Chrysler and Fiat will be able to close the deal.
The sale would be financed by the U.S. and Canadian governments, which would take equity in the new Chrysler along with Fiat and a worker health-care fund.
“The alternative to the approval of the sale is liquidation,” U.S. Circuit Judge Amalya Kearse said during today’s hearing.
Thomas Lauria, a lawyer representing the Indiana pension funds, who rank as secured creditors, said the decision to approve the sale by bankruptcy judge Arthur Gonzalez puts the concept of secured debt “at great peril.”
Dennis Jacobs, the chief judge on the panel, asked Lauria what the bankruptcy court should have done.
“The motion should have been denied,” Lauria said.
“There were no other bidders” Kearse told him. “It seems the bankruptcy court had no alternative.”
Building the Company
Lawyers representing consumer and asbestos victims of Chrysler also argued against the terms of the sale in a courtroom filled with hundreds of spectators. In rebuttal, Chrysler’s attorneys and representatives of the U.S. Treasury sought to persuade the panel that the sale conforms to U.S. bankruptcy and other laws.
Chrysler, based in Auburn Hills, Michigan, was set to complete the sale today at noon before the appeals court froze that plan so it could hear the case.
“Chrysler is pleased with the Court’s decision and appreciates the Court’s recognition of the need for a swift conclusion to the process, so that we can start building the new car company,” said Fredric Spar of Kekst & Co., a spokesman for Chrysler.
Indiana pension funds and other creditors appealed a ruling by the judge in charge of Chrysler’s bankruptcy case, who approved the sale. He found Chrysler had satisfied conditions to use a quick-sale provision of the bankruptcy code rather than have to go through the usual, lengthy process of asset sales, including hearings, evidence presentation and valuation trials.
GM Bondholders
Bondholders of Detroit-based GM are objecting to its plan for a similar spinoff, which company officials want to complete within 60 days.
The Indiana funds, holding $42.5 million of $6.9 billion in Chrysler secured loans, failed to convince Gonzalez that the carmaker’s spinoff plan is illegal on several grounds.
Companies can use the U.S. bankruptcy code’s Section 363 to seize a fleeting opportunity to sell assets without the usual procedures. Gonzalez said in a May 31 decision that this was such a case, citing the small window of time Fiat has insisted upon for the sale.
In bankruptcy court, the funds had also argued that the use of $2 billion in loans from the Troubled Assets Relief Program to finance the deal was illegal because the law was only intended to help financial institutions, not manufacturers.
Extraordinary Powers
Chrysler and General Motors have taken about $25 billion in bailout loans and want about $40 billion more to complete their reorganizations.
The funds had also argued unsuccessfully that the asset deal, given its distribution of equity stakes to various parties, was a stealth reorganization plan, which is not allowed by Section 363. The deal proposes that the U.S. Treasury own 9.9 percent of the new Chrysler, the Canadian government 2.5 percent, a workers health-care trust almost 68 percent and Fiat 20 percent. Later Fiat has an option to increase its stake to 51 percent.
The funds are holdouts in a creditor group that threw more than 90 percent support behind Chrysler’s plan to become a more competitive carmaker.
Chrysler’s secured lenders, including the Indiana funds, will get $2 billion from the U.S. government if the transaction goes through and as little as $800 million in a liquidation, Gonzalez said in his 47-page ruling.
The case is In re Chrysler LLC, 09-50002, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The appellate case is In re. Chrysler LLC, 09-2311-bk, U.S. Court of Appeals for the Second Circuit (Manhattan).
To contact the reporter on this story: David Glovin in U.S. Bankruptcy Court in New York at 9245 or [email protected]; Tiffany Kary in New York Bankruptcy Court at [email protected].
Last Updated: June 5, 2009 17:31 EDT
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By Tiffany Kary and David Glovin
June 5 (Bloomberg) -- A U.S. Appeals Court panel refused to block Chrysler LLC’s planned sale of its best assets to a group led by Italy’s Fiat SpA, and a group of creditors opposing the transaction said they would appeal to the U.S. Supreme Court.
The panel delayed the Chrysler sale until 4 p.m. on Monday, June 8, or until the Supreme Court says the sale shouldn’t be delayed. The judges affirmed the decision of the U.S. Bankruptcy Court, which said the only alternative to the sale was liquidation of the company.
The ruling may allow the new Chrysler to save 38,500 jobs and more at its suppliers, as well as permitting the carmaker to transfer its Jeep, Chrysler and Dodge brands to a new company stripped of most debt so it can be competitive in world markets. It may also benefit General Motors Corp., which plans a similar quick spinoff of its assets, for the same reasons.
“The affirmance does set a precedent that the structure of this quick sale is acceptable, and that will help GM and discourage appeals,” said Seton Hall University bankruptcy law professor Stephen Lubben in an interview after the hearing.
A creditor bid for Supreme Court intervention would likely go first to Justice Ruth Bader Ginsburg, who handles emergency matters from the New York-based federal appeals court that ruled today. She could act on her own or refer the request to the full nine-member court.
Monday Deadline
The votes of at least four of the nine justices are required for the court to consider the appeal. If the Supreme Court doesn’t act by 4 p.m. on Monday, Chrysler and Fiat will be able to close the deal.
The sale would be financed by the U.S. and Canadian governments, which would take equity in the new Chrysler along with Fiat and a worker health-care fund.
“The alternative to the approval of the sale is liquidation,” U.S. Circuit Judge Amalya Kearse said during today’s hearing.
Thomas Lauria, a lawyer representing the Indiana pension funds, who rank as secured creditors, said the decision to approve the sale by bankruptcy judge Arthur Gonzalez puts the concept of secured debt “at great peril.”
Dennis Jacobs, the chief judge on the panel, asked Lauria what the bankruptcy court should have done.
“The motion should have been denied,” Lauria said.
“There were no other bidders” Kearse told him. “It seems the bankruptcy court had no alternative.”
Building the Company
Lawyers representing consumer and asbestos victims of Chrysler also argued against the terms of the sale in a courtroom filled with hundreds of spectators. In rebuttal, Chrysler’s attorneys and representatives of the U.S. Treasury sought to persuade the panel that the sale conforms to U.S. bankruptcy and other laws.
Chrysler, based in Auburn Hills, Michigan, was set to complete the sale today at noon before the appeals court froze that plan so it could hear the case.
“Chrysler is pleased with the Court’s decision and appreciates the Court’s recognition of the need for a swift conclusion to the process, so that we can start building the new car company,” said Fredric Spar of Kekst & Co., a spokesman for Chrysler.
Indiana pension funds and other creditors appealed a ruling by the judge in charge of Chrysler’s bankruptcy case, who approved the sale. He found Chrysler had satisfied conditions to use a quick-sale provision of the bankruptcy code rather than have to go through the usual, lengthy process of asset sales, including hearings, evidence presentation and valuation trials.
GM Bondholders
Bondholders of Detroit-based GM are objecting to its plan for a similar spinoff, which company officials want to complete within 60 days.
The Indiana funds, holding $42.5 million of $6.9 billion in Chrysler secured loans, failed to convince Gonzalez that the carmaker’s spinoff plan is illegal on several grounds.
Companies can use the U.S. bankruptcy code’s Section 363 to seize a fleeting opportunity to sell assets without the usual procedures. Gonzalez said in a May 31 decision that this was such a case, citing the small window of time Fiat has insisted upon for the sale.
In bankruptcy court, the funds had also argued that the use of $2 billion in loans from the Troubled Assets Relief Program to finance the deal was illegal because the law was only intended to help financial institutions, not manufacturers.
Extraordinary Powers
Chrysler and General Motors have taken about $25 billion in bailout loans and want about $40 billion more to complete their reorganizations.
The funds had also argued unsuccessfully that the asset deal, given its distribution of equity stakes to various parties, was a stealth reorganization plan, which is not allowed by Section 363. The deal proposes that the U.S. Treasury own 9.9 percent of the new Chrysler, the Canadian government 2.5 percent, a workers health-care trust almost 68 percent and Fiat 20 percent. Later Fiat has an option to increase its stake to 51 percent.
The funds are holdouts in a creditor group that threw more than 90 percent support behind Chrysler’s plan to become a more competitive carmaker.
Chrysler’s secured lenders, including the Indiana funds, will get $2 billion from the U.S. government if the transaction goes through and as little as $800 million in a liquidation, Gonzalez said in his 47-page ruling.
The case is In re Chrysler LLC, 09-50002, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The appellate case is In re. Chrysler LLC, 09-2311-bk, U.S. Court of Appeals for the Second Circuit (Manhattan).
To contact the reporter on this story: David Glovin in U.S. Bankruptcy Court in New York at 9245 or [email protected]; Tiffany Kary in New York Bankruptcy Court at [email protected].
Last Updated: June 5, 2009 17:31 EDT
Thanks Bob. Always good to see it in writing. I am willing to bet that there are not 4 votes to take this on. The supreme Court is not in the business of assessing asset value, and given the bankruptcy court's assessment on the asset value th erule of law on the secured creditors aspect is clear.
I am hopeful they do not want to get into an executive branch abuse of TARP fund controversy as that would put the entire automotive industry into an immediate tailspin. Could you imagine all TARP recipients that are not so-called banking institutions having the TARP assets frozen. That would be a huge impact, with all probability a near total loss of our manufacturing sector.
I am hopeful they do not want to get into an executive branch abuse of TARP fund controversy as that would put the entire automotive industry into an immediate tailspin. Could you imagine all TARP recipients that are not so-called banking institutions having the TARP assets frozen. That would be a huge impact, with all probability a near total loss of our manufacturing sector.
I would not be worried. The probability of the Supreme Court second guessing the Second Circuit, one of the more prestigious Circuits, in the instant situation is zero. The underlying question is fact based and the Second Circuit already found that the Bankruptcy Court's finding of fact was accurate. To wit, there was no other offer on the table for Chrysler. The rest is irrational legal ************. ( Pun intended.)
tennis tom
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My interpretation of what has transpired is that the law has become an ass!
tennis tom
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Am I missing something here? Our auto industry is in a huge tailspin. Most of our manufactuing sector has been outsourced to China.
This is a last ditch effort to retain some semblance of manufacturing in our nation. I shudder to think what would happen if we ever had to defend ourselves from an outside, (or inside), attack or come to the aid of our "allies" like we did in WWII. What are we going to do, defend our selves with spit balls, paper cuts or the really big one--throw the whole ream of paper at them?
If it weren't for our ability to retool and gear-up our manufacturing plants creating ships, planes, tanks and Jeeps during WWII, we would be speaking German and Japanese today.
Is it in this nation's best interest to turn over the majority of our auto manufacturing sector to foreign powers. Do you remember who's side Italy was on in WWII?
This is not to mention the tens of thousands of employees, in communities large and small, playing ancillary roles to the auto industry. Many of their lives and futures will take a tailspin being ruined in a few days. This country has become the greatest nation in history, for the good of it's citizens and the rest of the planet, on it's wheels--not expresso!
In my fair frisco-town, where much of this chicanery eminates from, we have laws regulating when a large business decides to shut-down. It must go through a long notification and retraining process to lessen the impacts on it's employees. I have heard not a word of concern, mitigateing the deep and dire human impacts this massacre is creating from the Transparent Administration--but they are certainly delievering on it's promise of change.
In what is happening here, you have the seeds of revolution--Jefferson said there sould be one every 20 years.
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ledfoot
Viper Owner
Prozac time.
Nothing like what would happen if all TARP funds would require immediate repayment. That would shut the doors of GM and Chrysler and a whole number of suppliers immediately. That would be a tailspin they would talk about for hundreds of years.
Impossible to regulate the speed at which a business goes out of business. Yes you can regulate how a large business closes an operation, but the entire entities closure date and speed cannot be regulated.
That is your interpretation. But 2 independent judges, or panel of judges, disagree with your interpretation. I am williing to bet the third (the Supreme Court) just accepts what is and does not delve further.
I agree with your auto industry comments. the auto industry is central to the industrial age that helped build the America we know.
tennis tom
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tennis tom
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But the government is regulating how Chrysler's dealers are going out of business--it gave them 30 days to shut down. If these were preferred union shops in Pelosi country, all hell would break loose and there would be rioting in the streets. Emergency legislation would be drawn up in smoke filled rooms to stop this outrage.
Regarding SCOTUS, one thing I have learned in my long history in the courts is not to predict what they will do. There is a conflict here between jurisdictions and they could well throw this back to the lower courts and tell them to look at it again.
Given how this country has operated up until this regime took power, this could stretch out for a very long time. Legally speaking, this could get very interesting, very fast. The AG of Indiana is not going quietly. He views this as a states rights issue.
One thing for certain is that many people are discovering that the government is NOT their friend nor operating for the general welfare.
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Lawrenzo
Enthusiast
There is a growing chorus of States that are starting to "push back".
Dale.Volz
Enthusiast
Check out the article "Congressional letter alleges Nardelli and Chrysler failed to disclose more lucrative offer for Viper" posted on the autoblog at Congressional letter alleges Nardelli and Chrysler failed to disclose more lucrative offer for Viper
In part the article states "In a letter from California Congressman Darrell Issa to Chrysler's Bob Nardelli, the Auburn Hills executive is charged with failing to disclose information regarding the sale of the Dodge Viper line. . . The Committee has conducted interviews and reviewed materials that clearly show there was in fact one purchaser willing to pay $35 million to purchase the Viper line."
Most troubling is this speculation: "As you know, the Fiat group includes Ferrari, a Viper competitor in the sports car market. If it is the case that Fiat used its "hard-fought" superior bargaining position to establish as a condition of the merger a requirement that Chrysler allow the Viper brand to disappear in order to reduce competition for Ferrari, this too must be presented to the court."
In part the article states "In a letter from California Congressman Darrell Issa to Chrysler's Bob Nardelli, the Auburn Hills executive is charged with failing to disclose information regarding the sale of the Dodge Viper line. . . The Committee has conducted interviews and reviewed materials that clearly show there was in fact one purchaser willing to pay $35 million to purchase the Viper line."
Most troubling is this speculation: "As you know, the Fiat group includes Ferrari, a Viper competitor in the sports car market. If it is the case that Fiat used its "hard-fought" superior bargaining position to establish as a condition of the merger a requirement that Chrysler allow the Viper brand to disappear in order to reduce competition for Ferrari, this too must be presented to the court."
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tennis tom
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I predict this will not end here. Many of the people effected are still in a state of shock. The small town Chrysler dealers interviewed on Fox News look in shell-shock. These people are not "stealer=ships" but rural dealers who have been selliing American cars for generations. They are not going to go quietly without a fight.
This redistribution of wealth and colonization of the US will be played out for a long time to come. If not in the courts, then in the streets. We are in a Constituional crisis--most people just don't know it yet.
This redistribution of wealth and colonization of the US will be played out for a long time to come. If not in the courts, then in the streets. We are in a Constituional crisis--most people just don't know it yet.
I don't want to say I told you so--but--I told you so.
Me thinks you gloated too soon. But I will say that I told YOU so. See below.
WASHINGTON (AP) - The Supreme Court has cleared the way for Chrysler's sale to Fiat, turning down a last-ditch bid by opponents of the deal.
The court said late Tuesday it had rejected a plea to block the sale of most of Chrysler's assets to the Italian automaker. Chrysler, Fiat and the Obama administration had warned that the high court's intervention could have scuttled the sale. A federal appeals court in New York had earlier approved the sale, but gave opponents until Monday afternoon to try to get the Supreme Court to intervene. Justice Ruth Bader Ginsburg ordered a temporary delay just before a 4 p.m. deadline on Monday.
Now the court has freed the automakers to complete their deal.
TCurtner
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tennis tom
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