If SCOTUS decides to hear the case, it will almost certainly have massive economic impact on the U.S. and even the world economies. But if they decide not to hear the case, presumably because not hearing it would be in the public interest, the rule of law as regards creditors in financial transactions will be changed significantly for a long time. Bankruptcy will never be the same if a third party can trump all the loan and security agreements held by legitimate creditors. By not adjudicating the case before them, SCOTUS will have "made law from the bench"...big time!

Interesting question. What do you folks think they should do?

My answer: SCOTUS should decline to hear the case because of the time required to adjudicate the case and the chance that the decision would be to uphold the rights of the claimants, effectively overturning the pre-packaged bankruptcies of both Chrysler and GM. It's quite apparent that the creditors of both companies would never agree to a Plan of Reorganization by themselves, and without debtor-in-possession financing in place, both companies would have to shut down and probably have to be liquidated. As offensive as the involvement of the government was in arranging the pre-packaged Plan of Reorganization, it wouldn't have happened without their involvement.

But SCOTUS should make it abundantly clear to the Congress that laws need to be enacted to prevent or preclude actions such as taken by the Fed to trample the legitimate rights of creditors in "the public interest" that occurred in the Chrysler and GM bankruptcies. It's a question of whether we really want to be a democracy...or a benevolent dictatorship. The scary thought is that we have to rely on the U.S. Congress to decide.