SCOTUS Stays Chrysler - Fiat Deal

Discussion in 'Economics' started by pspr, Jun 8, 2009.

  1. pspr


    Maybe the rule of law will be upheld afterall.

    Supreme Court Justice Ruth Bader Ginsburg has temporarily delayed Chrysler's sale to Fiat.

    Ginsburg says in an order Monday that the sale is "stayed pending further order."

    The action indicates that the delay may only be temporary.

    Chrysler has said a delay could scuttle the deal.

    A federal appeals court in New York had earlier approved the sale, but gave opponents some time to file an appeal with the Supreme Court.

    The Chrysler case could set a precedent for General Motors [GMGMQ 1.09 0.225 (+26.01%) ], which is using a similar quick-sale strategy in its bankruptcy in New York.

    A group of Indiana pension funds argued that the sale of Chrysler unlawfully rewards unsecured creditors ahead of secured lenders and amounts to an illegal reorganization plan, and that the U.S. Treasury Department overstepped its legal authority by using bailout funds for Chrysler when Congress intended the money for banks.
  2. Late on Tuesday, the Supreme Court cleared the way for the sale of the bulk of Chrysler LLC’s assets to Fiat Group SpA, rejecting an appeal by a trio of Indiana pension and construction funds, consumer groups and others to block the transaction.