Comments on: GM Bankruptcy in SDNY: Improper Forum Shopping or Search for a Sophisticated Bench?

By: Cynthia Kouril

Cynthia Kouril — Tue, 02 Jun 2009 14:28:45 +0000

I notice, btw, this is cross-posted elsewhere. Why it shows up here is rather curious.

This post was written for FDL. If it crossposted elsewhere, that was done w/o requesting my permission or contacting our editors or publisher.

This is an FDL post.

By: Cynthia Kouril

Cynthia Kouril — Tue, 02 Jun 2009 13:50:45 +0000

I sincerely doubt that Obama, who has been a practicing lawyer, would have an ex-parte communication with a judge about a pending case. Nor would I expect any of the judges in SDNY to permit such a thing.

‘Tis a big No-No

By: Cynthia Kouril

Cynthia Kouril — Tue, 02 Jun 2009 13:47:33 +0000

Not for nuthin’, but I linked to that article in my post.

By: laborite57

laborite57 — Tue, 02 Jun 2009 13:35:43 +0000

Years ago when I was a business news reporter, a North Carolina-company with its HQ in New Jersey filed for chapter 11 in NY. Confused by this I asked a veteran lawyer I knew. He said (paraphrase) “Oh, all big businesses prefer to file in New York. If they file in North Carolina some hilly billy judge might actually expect them to pay back all the money they owe.”

By: alank

alank — Tue, 02 Jun 2009 13:29:35 +0000

After all, no one is surprised when corporate litigations are sited in Delaware, are they?

No, and for very particular reasons having naught to do with expertise.

The degree of expertise is irrelevant when the motives are elsewhere.

I notice, btw, this is cross-posted elsewhere. Why it shows up here is rather curious.

By: bobh

bobh — Tue, 02 Jun 2009 11:00:53 +0000

How many of the surviving dealerships are complaining about “socialism”?

Even if this doesn’t work out long term, the collapse can be deferred to a time when the overall economy is strong and better able to absorb it.

By: BooRadley

BooRadley — Tue, 02 Jun 2009 08:13:32 +0000

Thanks Cynthia.

By: DeadLast

DeadLast — Tue, 02 Jun 2009 05:37:26 +0000

BK judges are assigned cases on rotation. In fact there are geographic areas that compete for cases. The key is that you need to have a toe-hold in that area. My guess is that the dealership filed for bankruptcy last week. This week, when the mothership filed, they asked to have the cases consolidated — hence it is in NYC.

Eastern Airlines did this back in the day. They were worried about what judge they would get in Miami, so they had their executive club file first in NYC, because that is where it was incorporated, and then they had the cases consolidated after they knew what judge they had. Had they got a sucky judge, they were prepared to file in Miami.

This is done all the time. It is generally done for the benefit of the corporation, not the shareholders. My guess is that this was an inside job from the start. Obama was in New York this weekend, and I bet he just happened to stop by the judge’s chambers or favorite coffee shop and say how important it is to America that this thing happen right away.

The one thing I find funny that no one is talking about is if the US owns 60%, Canada 15%, and the unions 25%, what happened to all those bondholders who didn’t want to swap debt for equity? I wonder if that new $30 billion had anything to do with getting them to shut the fuck up?!!!

By: Teddy Partridge

Teddy Partridge — Tue, 02 Jun 2009 00:08:32 +0000

Well, then, maybe these expert judges need to be reassigned to other circuits, so that their expertise is available nationwide.

By: JDM3

JDM3 — Tue, 02 Jun 2009 00:06:26 +0000

Is the rule still that venue in bankruptcy is transitory, assuming minimum jurisdictional contacts, eg, the dealership? A majority of the creditors could claim forum non conveniens to shift back to Michigan. Who really gets fucked is the UAW, and none of the other creditors could care less that the union is litigating from Detroit. Plus I’m quite sure DOJ is fine with it, since their clients aren’t trying to “win” anything except watching the Auto Workers erode while Obamco says we’re doing all we can, here’s a minority common position in the stack of shit with no board representation and no say in management. Plus as already noted by Ishmael, there’s the covering argument that the BSDNY has the experience and expertise based on the fucking the union took in Chrysler. Not, BTW, that a bankruptcy judge sitting in Michigan is bound by any means (or likely to) give the workers a better shake.