Judge Gonzalez Now Guilty Of Intentional Fraud In Chrysler Case (from Donofrio)
Donofrio explains his intent to appeal on behalf of Chrysler dealers...
[Thanks, SeizetheCarp.]
Posted on 02/09/2010 8:49:14 AM PST by STARWISE
The entire case against the rejected Chrysler dealers revolved on one simple answer given by Fiat Executive, Alfredo Altavilla, when he was cross-examined by Dealer Counsel during the hearing to decide the fate of Chrysler.
Every other witness testified that neither the US Government nor Fiat requested that Old Chrysler reject the 789 Dealer franchise contracts.
Without a request by the lender (the US Government) or the purchaser (Fiat), there was no sound business judgment in Old Chrysler killing off 789 franchises.
This is because when a contract is rejected in bankruptcy, Section 365(g) of the Bankruptcy Code kicks in and gives those rejected dealers an unsecured creditor claim against the estate. In this case, it was undisputed that the claim would potentially reach one billion dollars.
Old Chrysler had a fiduciary duty to its other creditors not to burden the estate with this mammoth claim. However, had a key party sought rejection of those franchise agreements as a condition precedent to the deal closing then the Court might have been justified to approve the rejections.
But no party ever testified that the dealer restructuring was a necessary condition precedent to the sale closing.
The New Chrysler management were free to trim the dealership network once they took over. After they owned the company, they could deal with the dealers as they liked and as would have been governed by State franchise laws which protected the dealers.
And all of the evidence shows that Fiat was happy to take on the entire dealership network in the sale. The decision to kill off 789 dealerships was entirely the brain collapse of Old Chrysler’s management.
Therefore, the issue to be decided by the Court was whether this decision was made in sound business judgment.
The entire dealer rejection issue then turned on whether the rejections were a condition precedent to the sale closing.
If it was not a material issue to Fiat, and if Fiat’s executive testified that they were happy to trim the dealership network after the sale closed, then Old Chrysler should not have been allowed to reject the dealer contracts. The Bankruptcy Court – under Section 365(a) of the Bankruptcy Code – must approve the rejections for them to become effective.
Here is the exact testimony by Alfredo Altavilla of Fiat which the case turned on:
Q. If this transaction closes without an absolute requirement of a particular number of dealers that are being terminated, would Chrysler still go through with this deal — I mean, rather, would Fiat still go through with this deal?
A. The answer is that a restructure needs to occur. Whether it occurs before or after the closing of the deal is not a material difference.
(See May 27, 2009 Hearing Transcript at 352.)
It’s a very straightforward answer. Altavilla clearly testified that whether the dealer restructuring took place after the sale closed made no material difference to Fiat.
Clearly, this man and his foreign company were not going to walk away from a deal where the American people paid the ENTIRE 20 plus billion dollar purchase costs just to hand it over to Fiat for free. Zippo nada zilch was paid by Fiat who were therefore in no position to demand 40,000 American jobs be lost and 789 dealerships be gutted. Fiat didn’t make that insane demand and the testimony above clearly shows this to be true.
But Judge Gonzalez decided he was going to usher in a new era of judicial ventriloquism by taking on a new role for his soiled robe.
Gonzalez understood that the testimony needed for him to approve the rejection of 789 dealers (and loss of some 40,000 jobs) was nowhere to be found in the record of the case. So Judge Gonzalez – through the use of creative footnoting – made up his own testimony and stuffed it into the mouth of Altavilla alla Edger Bergen and his dummy Charlie McCarthy. Seriously folks – the metaphor is so very appropriate.
Please compare and contrast Alatvilla’s testimony with Judge Gonzalez at Footnote 21 of the Gonzalez Rejection Opinion:
ALTAVILLA’S TESTIMONY
Q. If this transaction closes without an absolute requirement of a particular number of dealers that are being terminated, would Chrysler still go through with this deal — I mean, rather, would Fiat still go through with this deal?
A. The answer is that a restructure needs to occur. Whether it occurs before or after the closing of the deal is not a material difference.
THE JUDGE GONZALEZ OPINION AT FOOTNOTE 21
21 …Altavilla also responded affirmatively to a question regarding whether a dealership network needed to be restructured for the Fiat Transaction to close, stating that a “restructuring needs to occur.”
Altavilla never responded to any such question in the affirmative. Never, damn it. This is a fraud on the Court, on the nation and on truth. Any grammar school child can easily grasp that the witness clearly indicated restructuring was not a material difference to Fiat.
And if it was not a material difference to Fiat, 789 dealers and 40,000 jobs could have been saved while your Government gifted this American auto institution to a foreign national conglomerate with your own taxes. That’s it in a nutshell, people.
In our original Motion memorandum we gave Judge Gonzalez the benefit of the doubt and refrained from calling this fraud intentional – opting instead to allege only that the Court’s judicial ventriloquism exhibited a reckless disregard for the truth.
But on Friday Feb. 5, 2010 Judge Gonzalez denied our Motion by issuing a 25 page Opinion (docket no. 6341 – public docket appears down today) which condoned intentional fraud on the part of Chrysler’s attorneys – Jones Day – who repeated multiple falsehoods in their Response Brief which we thoroughly dismantled in our Reply.
Furthermore, in not correcting the error of Footnote 21, Judge Gonzalez is now also guilty of intentional fraud as well. He’s chosen to defend Footnote 21 and in doing so he is simply lying to the American People which is obvious to any impartial observer of the facts. Footnote 21 is simply a lie by a partial Judge. It’s fraud plain and simple.
The Law Office of Pidgeon & Donofrio (site will soon be updated to include Leo Donofrio’s info) will be appealing to the Southern District of New York and we will be making multiple complaints to the New York Bar asking for sanctions against Jones Day and Judge Gonzalez.
Our lead client, James Anderer has been on Fox Business News about 40 times now and we are hoping to increase public awareness through the media of this fraud. The Chrysler story is only now truly being understood for the fraud against the American way that it is. Please stand with us as this battle is sure to intensify. The disease we are fighting is at the core of the intended destruction of this nation’s natural sovereignty.
Understand that this battle is as important a fight as this nation will ever see. It will define whether we are going to allow the judicial branch to openly lie to our faces.
If no court will overturn Gonzalez here, it’s the end of truth, justice and the American way forever. This judicial fraud will become the template for a new tomorrow where your children will have no protection of law.
### Leo Donofrio and Steve Pidgeon represent 76 former Chrysler dealers.
Biography
Judge Gonzalez received an undergraduate degree in accounting from Fordham University in 1969 and a masters degree in education from Brooklyn College in 1974. He received a J.D. from Fordham University School of Law in 1982. He also received an L.L.M. in taxation from New York University School of Law in 1990. Judge Gonzalez was an attorney in the Office of Chief Counsel of the Internal Revenue Service and earned the Chief Counsel's Special Achievement Award for three consecutive years. Thereafter, he entered private practice. Judge Gonzalez was appointed Assistant United States Trustee in the Southern District of New York in 1991.
He was appointed United States Trustee for Region 2 (Second Circuit) in 1993 and served in that position until his appointment to the United States Bankruptcy Court for the Southern District of New York in 1995. He presides over many large complex corporate reorganizations, including the Enron and WorldCom cases.
Prior to beginning his law career, Judge Gonzalez was a teacher in the New York City School System for 13 years.
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Related
Chrysler Bankruptcy: Motion Denied, To Be Appealed; Fraud Complaints To Be Made
~~~
Chrysler Bankruptcy, case of judicial fraud? Dealership Attorneys to appeal Motion denial"
~~PING!
Totally corrupt judiciary.
Good bye rule of law. Welcome to the United States of the Banana Republic of America.
(By the way...The same judicial corruption is occurring with the birther cases.)
Chief Judge Arthur J. Gonzalez
All Written Opinions (published and non-published since April 2005)
http://www.nysb.uscourts.gov/cgi-bin/opinions.pl?judge=ajg&order=rev
I never understood how closing down dealerships was going to help Chrysler (or GM for that matter) to sell more cars? If you want to sell more of anything you want to increase your sales force and sales outlets, not reduce them.
It has been noted that the dealerships picked for closure (for both Chrysler and GM) were the folks who did not support Obama. That's all the more reason why I will no longer support either of these brands. As a matter of fact, if we could get all conservatives to boycott them they'd go bankrupt like they should have instead of us bailing them out.
Think about it this way, if the Judge did not order the Rejection, it would have been up to Fiat SOLELY whether or not dealers lost their franchises, and which ones. Some of those dealers had SUCCESSFULLY been in business since the 1920’s!!!!!!!!!!
Dealerships handed down from father to son over decades.
Why would the Judge order this, when NO ONE party to the sale requested it?
A phone call in the night perhaps? Because the Footnote 21 takes legal sworn testimony OUT OF CONTEXT, and that is FRAUD. Gonzalez had the opportunity to correct the “error” if indeed that is what it was with this Motion, but he denied it. And golly look at this... he’s a chief justice now... isn’t that just a coinkidink?
I think not.
Ping...
Donofrio explains his intent to appeal on behalf of Chrysler dealers...
Judge Gonzalez Now Guilty Of Intentional Fraud In Chrysler Case (from Donofrio)
Donofrio explains his intent to appeal on behalf of Chrysler dealers...
[Thanks, SeizetheCarp.]
Donofrio, once again, misses the point. If Judge Gonzalez got the testimony wrong, that issue could have been raised on appeal. The case was appealed, and that issue was not raised, so it's too late to raise it now.
Donofrio tried to rely on a narrow exception that lets you raise issues late if they are based on a "fraud on the court." The idea is that if, for example, one party submits a forged document into evidence, and the fraud isn't discovered until later, you can raise the issue late because it couldn't have been raised on appeal-- nobody could have known about the forgery. Here, the evidence of what Donofrio calls "fraud" is right in the transcript, so it could have been raised on appeal, and Donofrio is too late.
Sorry, folks, but Judge Gonzalez is right and Donofrio is wrong.
How dare they not allow a plaintiff who failed to address an issue on appeal take another shot at by trying to reopen the case through a loophole that is not really a loophole?
Scum...all of them.
It amazing that all the birther attorneys failures in court are the result of corrupt judges and not weak cases or inept attorneys.
The Birthers have hired the finest legal minds in the country. How dare you denigrate them?
Weren’t those dealership singled out based on to whom they gave their money to (elections, etc.)???
Perhaps that was part of the plan, Lurking Libertarian.
Donofrio, I think, is just itching to file a Quo Warranto case in Washington, D.C., District Court against Obama. Now he has sworn legal testimony from Fiat that breaking those contracts with dealerships was not their act. It was the government’s illegal doing.
I suspect that ‘Big D’, who earns money by playing poker and chess tournaments, read his opponent and KNEW this would most likely be the court’s decision.
Obama better look out and we all ought to stock up on popcorn. The fireworks this summer should be awesome!
He always had that testimony-- it was in the original bankruptcy hearing. What he has now is a judicial finding, binding on his clients, that they had a perfectly good remedy for the termination of the dealerships and didn't use it when they could have.
Obama better look out and we all ought to stock up on popcorn. The fireworks this summer should be awesome!
Don't stock up too much. The D.C. District Court is not going to permit Donofrio to file any quo warranto.
You may be right, but I hope you’re wrong.
Goodness knows, I am no fan of Obama's, but I am a lawyer with 30+ years of experience in federal courts, and I know a case that's going nowhere when I see one.
Oh, goody! You’re a lawyer.
“...we will be making multiple complaints to the New York Bar asking for sanctions against Jones Day and Judge Gonzalez...”
How does this work? Is it all political - no one wanting to draw the wrath of Obama, so injustice carries on unimpeded? Hopefully there are still lawyers who love the U.S.Constitution above their own self-interests, or am I being too old fashioned.
Does this mean that now lawyers and judges alike can lie and sustain fraud in court and in briefs if it benefits the government, who is their employer?
If you prefer not to answer, no problem. This situation is troubling to the point we’re thinking of leaving the country permanently. Somehow, I suspect Obama would like to see true believers in our Republic quit and leave.
First, courts decide major cases against the interests of the U.S. Government every day of the week. Judges have no problem accusing government lawyers of fraud and unethical conduct; look at the recent collapse of the Broadcom prosecutions for one example.
But, turning to this case, I have absolutely no way to know, without reading the entire transcript of the original hearing, if there actually was any fraud or not. But I suspect there was not, for two reasons: (1) the lawyers who originally represented the Chrysler dealers never made an issue out of this, even though the case went all the way to the Supreme Court; and (2) Donofrio's article shows such a misunderstanding of the legal process that I find anything he says dubious.
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