I don’t mind the occasional blonde moment. Sometimes they’re good for a chuckle or two. I don’t mind an honest mistake. It happens to the best of us. But, when professionals make mistakes, they are very costly and potentially devastating. Anyone who has ever had surgery knows the implications if their doctor makes a mistake. That goes for your accountant, banker, or tax preparation firm. Professional mistakes expose major arteries in our economy, our health, and our personal lives.

Yesterday, the SCOTUS declined to hear the complaint of Chrysler bondholders on the government brokered buyout by Fiat. What is at stake is at least a hundred years of stare decisis regarding the rights of bondholders in recovery of assets. When the SCOTUS makes a mistake of this magnitude it exposes the very heart of American jurisprudence.

When the federal government has the power to fire the CEO of a public company (Wagoner of GM) and dictate the terms of bankruptcy in favor of unions over bondholders (in both GM and Chrysler cases) you had better be aware they can now take and do whatever the heck they want.

You have been warned.

Advertisements