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Sunday, September 06, 2009
Ind. Gov't - More on: "Petitions U.S. Supreme Court, Seeks Equitable Compensation for Indiana Funds Affected by Chrysler, LLC Bankruptcy"
Updating this entry from Sept. 4th, "Mourdock again aims at Chrysler: Wants bankruptcy sale re-examined" is the headline to a story today by Eric Bradner in the Evansville Courier & Press. Some quotes:
INDIANAPOLIS — State Treasurer Richard Mourdock is reviving his dormant effort to call the Chrysler bankruptcy proceedings into question.The U.S. Supreme Court rejected a June bid by three Indiana funds to block a deal that Mourdock, a former Vanderburgh County commissioner, said would break from ordinary process and cost Indiana funds millions of dollars. * * *
The Supreme Court's decision to reject an emergency appeal to halt the bankruptcy proceedings at the last minute was rejected, but the high court did not consider the merits of the trio of Indiana funds' arguments at the time.
A petition filed Thursday asks the Supreme Court to clarify whether similar bankruptcy proceedings should be allowed in the future — a question Mourdock for months has said needs to be answered.
"We are not asking for the bankruptcy sale of Chrysler to be reversed, which is legally impossible, but the losses to our funds are very real," Mourdock said.
"From the beginning, I have consistently stated that the federal government must follow the law, and that is why the appeal was filed." * * *
If the Supreme Court decides to hear the case, Indiana could recover some lost money, said Jim Holden, chief deputy and general counsel for the Indiana Treasurer's Office.
If the Supreme Court sides with Indiana, it could send the matter back to a bankruptcy court to determine how much money could be recovered and how that would work.
The state argues that a provision in U.S. bankruptcy code known as Section 363 was used in the Chrysler case as an end-around to avoid typical Chapter 11 bankruptcy reorganization, which provides more protection for creditors.
Indiana is asking the Supreme Court to determine whether Section 363 may be used that way in the future.
"It's being used more and more as a kind of back door for this kind of thing — to wipe out creditors' claims and reorganize," Holden said. "Our position is that's too much of a stretch."
Posted by Marcia Oddi on September 6, 2009 12:13 PM
Posted to Indiana Government