Haynes and Boone's Newsroom
John Penn Comments on Chrysler Appeal in Bloomberg
12/17/2009
When the Supreme Court decided not to hear an appeal from the ruling allowing Chrysler LLC to sell most of the assets, the method used by the high court set off a controversy among bankruptcy cognoscente about the effect on the lower court’s rulings and the implications for other bankruptcy cases.
The Supreme Court didn’t merely decline to hear the appeal. The high court on Dec. 14 “vacated” the judgment by the 2nd U.S. Circuit Court of Appeals in Manhattan and sent the case back with instructions to dismiss the appeal.
Voiding the opinion is significant because the ruling by the 2nd Circuit was a ringing endorsement of current practice in bankruptcy court where assets of even large companies can be sold four to six weeks after a Chapter 11 filing.
The appeals court ruling may still maintain significance in a practical sense. “You can’t un-ring the bell. It’s still out there,” said John D. Penn, a bankruptcy lawyer with Haynes & Boone LLP in Fort Worth, Texas.
Article excerpted from Bloomberg on December 17, 2009.