Quote:
Originally Posted by Villages Kahuna
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.
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So far the "system" has worked.
The current administration, filled with savvy attorneys, decided to try a slam-dunk on the bankruptcy laws. Some other folk, also having savvy attorneys, filed their request for emergency stay of a lower court decision to SCOTUS. Justice Ginsberg, who takes such stay requests for that particular region, granted the stay based on the sufficiency and legality of the request. At center stage within the application for a stay were matters of law which were believed left unresolved in the lower court's action, including: 1) the perceived illegality of TARP fund usage, 2) the failure to protect "absolute" debtors; and 3) ongoing and future lawsuits for product liability. For a better understanding of what is on the table, see
http://www.scotusblog.com/wp/the-blo...ysler-package/ which also has the briefs and summaries.
So, a "liberal" justice acted in a way that will have heavily upset the White House. If ever there was an example that SCOTUS justices are indeed independent, this was it.
SCOTUS will not get into a political tug-of-war with the White House or Congress. SCOTUS will not take an action counter to the law, and then ask Congress to write new laws so the Executive Branch doesn't break the law again. SCOTUS cannot
demand either of the other two branches do anything other than follow the law-of-the-land, as interpreted by the Court.
If the matter takes "too long" for the Administration or Chrysler or Fiat, that's tough. It just means they should have done it right the first time. If rights were trampled on, or laws broken in haste, that's why parties can seek redress in court, and that's what several have done.
So, the current administration is acting no different than the previous one(s), in that it is charging into actions with the subtlety of a rhino in a teashop, and acting more like a dictator than a Chief Executive - - and in doing so, is finding out that the US is not a dictatorship.
Not all cases which SCOTUS decides need involve oral argument or the opportunity to provide additional briefs. That is SCOTUS' choice whether to accept more filings or not. SCOTUS can summarily rule - either by a single-justice order or an entire-bench order - to let the matter stand, or kick it back to the 2nd Circuit Court of Appeals with direction. Just because the current administration is in a hurry or Chrysler & Fiat huff and puff will not matter. That's the beauty of our system of government. Indeed, the Founding Fathers were smart guys!