Letter From Indiana Pensioners' Richard Mourdock

June 22, 2009

Dear Friends & Supporters:

Now that all of the media attention and inquires have lessened, I wanted to thank all of you for the supportive phone calls, kind notes, and encouraging e-mails regarding Indiana’s involvement in the Chrysler, LLC bankruptcy proceedings. I have tried to respond to each of you individually, but given the enormous number of letters, calls, and emails have made that impossible. Forgive me for this impersonal note, which may read like a form letter, but please know that I have been personally touched by the incredible response of kindness by all of you.

From the beginning, Indiana’s legal challenges to the Chrysler, LLC bankruptcy dealt with the federal government throwing away the rules of bankruptcy law to benefit a select few. Indiana’s retired state police officers, retired teachers, and Hoosier taxpayers were victimized by illegal acts of the federal government, which was wrong. Let me be very clear, we never once suggest that Chrysler, LLC had broken the law. In reality, Chrysler, LLC, like any other corporation, could not have ignored 150 years of bankruptcy law like the federal government did.

I hold as a point of pride -- despite all the attacks by a couple of newspaper editorials, Chrysler, LLC, Indiana Congressman Joe Donnelly, Indiana Senator Evan Bayh, and some others -- no one EVER challenged us on the points of law. In the New York Bankruptcy Court, the New York District Court, the United States 2nd District Court of Appeals, and even the United States Supreme Court, no attorney for either the federal government or Chrysler, LLC, ever attempted to dispute our legal arguments. Even in the denial of our request to halt the bankruptcy proceedings by the Supreme Court of the United States, Madame Justice Ginsburg stated, “This denial of stay is not a decision on the merits on the underlying legal issues.” In essence, the Supreme Court prohibited our case from being heard on a technicality therefore deciding not to rule on the points of law that we raised.

The bankruptcy proceedings are finished and most of Chrysler, LLC is now the Chrysler Group. I hope to see them be productive, profitable, and prosperous.

Thank you again for your words of encouragement and for your support of my efforts to protect Indiana’s retirees and taxpayers.

Sincerely,

Richard E. Mourdock
Indiana Treasurer of State Sphere: Related Content

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Richard Mourdock's Take On The SCOTUS Decision

Fast fwd to 4:50 "There have certainly been threats made." by the administration.

Yet another confirmation of S-Rat's persuasive tactics.

Must watch interview with Indiana Pensioners' Richard Mourdock.

Interestingly, James Kwak of The Baseline Scenario seems to disagree with the Indiana Pensioners Fund argument for a variety of personal reasons. However, one question Kwak does not touch upon, which is at the heart of any "objective" argument, is how valid is this liquidation valuation in the absence of an adversarial analysis? Maybe James is aware that Greenhill put together their Fairness Opinion based exclusively on Capstone's liquidation report, which for all intents and purposes, was a biased, conflicted and unchallenged representation of reality.

If one is trying to be objective about this issue, it does necessitate an evaluation of all sides of the argument.

Zero Hedge has written and linked extensively to many much more detailed legal opinions (than that of the TBS) which consider that not only is TARP usage improper in this case, but also the Absolute Priority is, in fact, abrogated. But that is what a court is a venue for - to objectively voice various opinions with a fair chance of getting heard after the opportunity to prepare their case. One can argue that, aside everything else, these two critical aspects of the judicial system were soundly trampled upon in the Chrysler 363 sale.
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Indiana Chrysler 363 Objection Promptly Rejected

Barely did the Indiana pension funds submit the objection to the Chrysler asset sale yesterday, before the ever more Peck-esque Judge Gonzalez totally confirmed his brand new nickname "Speedy." In the filing below, S.G. outright denied Indiana's claims for a delay and halt in the process proceedings:

The movant’s papers do not address the fundamental issue of whether they have standing to challenge any governmental action. There are substantial issues and disputes concerning the movant’s standing both under the Collateral Trust Agreement as well as the Supreme Court’s standing jurisprudence. Without having addressed these issues, the Court cannot say that the movant has clearly demonstrated that they have a substantial likelihood of succeeding on the withdrawal motion.

For the reasons provided above and those articulated by the objectors at the hearing, the Court finds, after weighing the harm to the movant and the harm to the estate, that the movant has not established their burden to impose a stay on the proceedings pursuant to Bankruptcy Rule 5011(c).

Boy, that denial came in less than 24 hours. Do those Jones Day lawyers realize they are charging US taxpayers by the hour: at this rate we will never get the chance to really pay them the $900/hour they deserve. What efficiency... And again, what a way to prevent inquiring into contractual rights, yet again. Seems like White & Case is cursed to not make any headway in this case ever.

Most interestingly, however, was the response of Indiana Treasurer Richard Murdoch, who swore not to invest any more capital in the debt of companies receiving federal aid... Maybe that's the only remaining way to stick it to the administration... Then again, it would likely take Geithner's Heidelberg Specials roughly 30 seconds to print enough cash to replace all the pension funds' cash contributions to the TARP alliance.

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Not So Fast: Indiana State Pension Fund Seeks To Block Chrysler 363 Sale, White & Case Retained

White & Case, made famous by its irreverent lawyer Tom Lauria, who led a valiant fight for the non-TARP lender committee until its disbandment after holdout after holdout decided fighting against the US government was not reasonable, has been retained again, this time by Indiana Pension Funds, holders of Chrysler first-lien claims, who are continuing where the non-TARP lenders dropped off.

In several motions with the Chrysler docket earlier, the Indiana State Teachers Retirement Fund, Indiana State Police Pension Trust, and Indiana Major Movers Construction Fund, fiduciaries for "approximately 100,000 civil servants, including police officers, school teachers and their families" have objected to the 363 sale, and demand Judge Gonzalez should block the sale, claiming "the plan is illegal and tramples their rights."

Among other things, the Indiana Pensioners seek to appoint both a trustee and an examiner in the case (an examiner was eventually retained in the Lehman bankruptcy), claiming that the company "has ceded control over their business and their restructuring efforts to the United States Treasury Department" which is using the Chapter 11 process to reward creditors that the "government deems politically important."

Not only that, but lawyers added that "the Treasury Department has taken constructive possession of Chrysler and is requiring it to adopt a sale plan in bankruptcy that violates the most fundamental principles of credit rights."

Whereas before it was easier to scapegoat certain evil, vicious hedge fund managers who could much easier be stripped of their fiduciary obligations and painted for the greedy, disgusting animals they are, Obama and Rattner will have a much more difficult time playing the blame game on this occasion, where the actual impaired party is so much closer to the people for whom it is a fiduciary, in this case, as the filing notes, roughly 100,000 ordinary men, women and children in the state of Indiana.

Lastly, this could significantly derail any plans for a fast and streamlined 363 sale: hopes were high that with the dissolution of the non-TARP committee it would be smooth sailing for Fiat and for the administration to get everything they wanted. With this last minute objection coming completely out of left field, Chrysler and its advisors will be stumped which lever in the media blame game to use now.

Publish at Scribd or explore others: School Work Law Law & Government Non-fiction bankruptcy Law

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