Law

Chrysler Reorganization Stayed by the Supreme Court

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One small victory for an economy governed by law rather than arbitrary power.

A suit brought on behalf of Indiana pension funds claim that Chrysler deal orchestrated by Obama’s administraion illegally gave priority unsecured creditors, violating the law that gives priority to secured creditors. The Indiana brief argued:

Without a stay, Chrysler’s section 363 sale will be able to close Monday afternoon, and this case will be moot. Mootness would not only deprive the Indiana Pensioners of an opportunity for full recovery, but it would deprive the Court and the Nation of the opportunity for final determination of substantial and novel issues of law never before addressed by this Court or any other (save the decisions below). These issues include (i) whether the Sale attempted here—indisputably the fastest reorganization on record—constitutes an illegal sub rosa chapter 11 reorganization plan and violates the longstanding and fundamental rule that first-lien creditors have absolute priority in bankruptcy, and (ii) whether Treasury has the authority to direct the course of, and fund, this bankruptcy through the use of TARP funds under the EESA. The Court should stay the Sale Orders so that the Indiana Pensioners may, in good order, ask the Court to review whether the law permits such wholesale alteration of bankruptcy law, not to mention the American capital markets, by the Executive Branch of the U.S. Government acting beyond the color of Congressional authority.

From the Application For Immediate Stay Of Sale Orders Issued By The Bankruptcy Court filed by the State of Indiana. (Much of it is actually engrossing reading, especially the way the Feds bullied everyone to accept repeated violations of the bankruptcy law.)

Stay granted.

Details here.

Probably only a speed bump. But it is good to see someone speaking truth to power for a change. Obama’s high-handed and lawless takeover of the auto industry is a disgrace, directed at helping his political allies first, and all other consequences second.

It is good to see even a symbolic victory for the rule of law.

Bravo to the Indiana Solicitor General’s office. A small victory, even a temporary victory, is better than no victory at all — and in a case like this one, much better than never having fought.

UPDATE: This comment from the Althouse blog is a good summary of the situation.

Worthwhile Reading

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Here are some items I thought might be of interest to Chicago Boyz and Chicago Grrlz and Readerz.

Megan McCardle on the moral infrastructure of capitalism.

via the Assistant Village Idiot, who adds thoughts of his own.

The seen and the unseen–an important article on political decision-making, written by a law school professor and drawing on the work of Frederic Bastiat. Highly relevant to the discussion over Obama’s Supreme Court nominee.

via Betsy

A long and well-written comment on my post the age of blather by kathteach. I am (sadly) willing to believe her when she says that few students now learn the art of reading carefully and analytically: however, I remain unconvinced that jargon such as “self-to-self connections” really helps in addressing the problem. Anyhow, the comment (at the end of the thread, at least at the moment) deserves to be read.

Bill Waddell has a baseball analogy for the way in which certain F500 manufacturing companies are run. But after reading about the backround of Obama’s point man on General Motors, I’ve been racking my brains trying to extend the analogy. Maybe someone who was selected as manager of a baseball team after impressing the owner while working on his (the owner’s) campaign for the city council?

Or maybe another analogy entirely.

Now, Brian Deese is probably–unlike the political appointees mocked by Gilbert & Sullivan in the above song–a very bright guy. He may even be a briliant guy. But I venture to say he would never have been selected for this job if his career path had actually been centered around working for companies that actually make things and sell them. Nor, of course, if he had the precise background and skills that he does have but had been working for the losing campaign.

Blogging and the Law

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The Wall Street Journal article titled “Bloggers, Beware: What You Write Can Get you Sued”. The article started with a discussion of a woman who was sued because she was in a dispute with a software company over accusations that customer data was compromised in an online forum. She was sued for defamation and she claimed protection under the “shield laws” which protect traditional (print, television) journalists. Her insurance company, Allstate, was paying for her legal costs under her “umbrella” insurance policy which is designed to fill in for potential issues not covered under auto and home owner policies.

Traditional issues with the web related to copyright infringement issues; one time I ran a different site that was hit with a “cease and desist” letter for publishing data about a certification process (not specific testing information) – I took the information down and posted the letter on the site instead. Nowadays it seems that much of the copyright infringement issues have migrated to downloading music because of the revenue losses; the newspapers and other institutions don’t seem to be going after blogs much.

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Quote of the Day

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… the right of self-defense was not a right that was enacted by governments and granted to the people. The right was inherent in the natural order of the world, and the right existed everywhere. The principle of a natural right of self-defense was pervasive among the American Founders. The Founders viewed resistance to tyranny … simply as an application of the right of self-defense, which was a natural right regardless of whether a person was attacked by a lone criminal, or by a large criminal gang, in the form of a tyrannical government.

David B. Kopel, The Catholic Second Amendment

(Good essay — but riddled with typos.)

Extremely Disturbing

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Obama has nominated Cass Sunstein, who he knows from the University of Chicago, to be “regulatory czar.” Apparently, Sunstein has proposed that web sites be required to link to opposing opinions. He has argued that the Internet is anti-democratic because users can choose to view only those opinions that they want to see, and has gone so far as to say:

A system of limitless individual choices, with respect to communications, is not necessarily in the interest of citizenship and self-government,” he wrote. “Democratic efforts to reduce the resulting problems ought not be rejected in freedom’s name.

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