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Chrysler Group LLC's restructuring is altering the bankruptcy landscape well beyond the auto industry.
Within days of a bankruptcy-court judge's approval of the government's plan to sell Chrysler to Fiat SpA and leave creditors with big losses, a lawyer in the bankruptcy case of the National Hockey League's Phoenix Coyotes invoked Chrysler in trying to push through the speedy sale of the team.
Should the judge approve that move and allow the Coyotes to be sold quickly, as Chrysler was, it could put some creditors out in the cold, leaving the NHL and other investors without the kind of input typically afforded by bankruptcy law.
Bankruptcy and financial professionals said such scenarios, if successful, could make investors demand higher interest rates on debt amid uncertainty over how they might fare should the firm encounter financial difficulties.
"The concern is that you have thousands of lenders, hedge funds, insurance companies who model their investments on rules and laws," said Stephen Lerner, a lawyer for a committee of Chrysler dealers. "How do these folks make investment decisions when they're faced with bankruptcy courts that appear to disregard the rules?"
To be sure, judges could reject such arguments as a short-term worry that likely will dissipate when the financial crisis ends.
The Obama administration's plan for pushing through Chrysler's restructuring has been criticized by some for going too quickly, which led to an end run around creditors, who got little say in the process. A few creditors objected in court, saying their rights were being denied, but they lost at all levels, including at the Supreme Court.
[Phoenix Coyotes owner Jerry Moyes] Associated Press
Phoenix Coyotes owner Jerry Moyes leaves U.S. Bankruptcy Court in Phoenix on Tuesday.
The Obama administration maintains that it used established bankruptcy procedures, and that extraordinary measures were needed to prop up an industry that could cripple the U.S. economy if it collapsed.
Lawyers who represent banks, hedge funds and other creditors fear the Chrysler precedent could be used to allow companies to get around established rules for reorganizations, and not just in extraordinary circumstances.
The point of contention with Chrysler was a procedure called a "363 sale," which refers to a section of the U.S. Bankruptcy Code. Such sales are typically used to shed assets in bankruptcy proceedings, such as a building or subsidiary that needs to be sold quickly to maximize its value, and can be done without creditor approval. But critics said Chrysler used the procedure to restructure the entire company.
General Motors Corp., which filed for bankruptcy protection June 1, plans to conduct a similar sale to sell its "good" assets to a new GM with fewer brands and less debt.
Lawyers are seizing on these examples to invoke the need for speed, claiming emergency circumstances.
Peter Kaufman, president of investment bank Gordian Group LLC, which advises companies on restructurings, said the auto companies' plans disenfranchise creditors, because they get no say on the sales when typically they would be entitled to approve a reorganization plan.
During a court hearing Tuesday, Thomas Salerno, a lawyer for the Phoenix Coyotes hockey team, said the case constitutes an "emergency" because James Balsillie, the co-head of BlackBerry manufacturer Research In Motion Ltd., is the "the only person who put a firm offer on the table," the team is losing money and the NHL draft looms.
[Hockey League Commissioner Gary Bettman ] Associated Press
National Hockey League Commissioner Gary Bettman outside the court. The NHL says a team sale isn't an emergency.
There are "some real exigencies here you can't ignore," Mr. Salerno said in an interview. He said a bankruptcy judge, given the nature of the case, took about three weeks to approve Chrysler's request to shut 789 dealerships, an effort by the auto maker to become more viable as it prepared to be sold to Fiat. "That's what bankruptcy courts do sometimes to deal with real emergencies," Mr. Salerno said.
The NHL said it holds rights on the Coyotes that forbid its sale to Mr. Balsillie, who wants to close the sale by the end of the month and move the team to Ontario, Canada. The league wants to continue funding the team until it can find a buyer to keep the team in Glendale, Ariz. "The league has been funding the club's operations and will continue to do so through the completion of an orderly sales process," said Bill Daly, the NHL's deputy commissioner. "There is no emergency."
Judges aren't necessarily going to ignore the rights of creditors. On Wednesday, U.S. Bankruptcy Judge Robert Drain sided with a group of Delphi Corp. lenders, who said a government-led plan to sell the auto-parts maker's operations to a private-equity fund trampled on their rights. Judge Drain ordered Delphi to hold an auction and allow bids to challenge the government-brokered sale to Platinum Equity LLC.
Still, critics said it is inevitable that lawyers will try to use the Chrysler and GM cases as precedent for cutting deals with select creditors and dodging approval from other stakeholders.
"It's going to happen," Gordian Group's Mr. Kaufman said. "The excuse that [the auto cases] are 'special circumstances,' I'm sure that's right until the next time it's a 'special circumstance.' " |
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发表于 2009-6-13 12:46 PM
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