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Jim Greene
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Note that the Supreme Court's decision was not binding as precedent. Chrysler's "secured" creditors getting paid after the unsecured was a clear breach of contract, but I believe the Court, realizing the political power behind the move-- UAW, new President, Congress-- let this water over the dam. Rightly, however, they don't want that choice to have any bearing generally as doing so would negate all secured creditors' rights. It's true, too, though, as someone observed, that if there had been no intervention/bailout, the secured creditors might not do much better with a bankrupt company. You can blame the UAW and its political influence. I just read some in Congress seek to keep all the dealerships going, and some to restore product liability suits. In a real bankruptcy, all that stuff is void, end of story. So, yes, this "bankruptcy" was very unconventional and legally questionable, and might be about to get even more ridiculous. But wiping out shareholders and screwing some secured creditors only to keep product liabilities, dealer and labor contracts is not a recipe for progress. Add to it management interference by Congressmen and it's starting to sound pretty backward. My vote now would be to just let them go under.
additional background:
Darius, That Michelin wheel is pretty cool, I hadn't realized that it was going into production. I see, though, that the company bringing it into being is GM subsidiary Opel, which will be reorganized or purchased soon, so we'll see how this project survives.