In opposition to the U.S. court of appeals’ approval of a Chrysler sale to Fiat last week, Indiana pension funds filed with the U.S. Supreme Court yesterday to delay the sale. U.S. Supreme Court Justice Ruth Bader Ginsburg has granted their request and has put the sale on hold.

Holding about $42 million of Chrysler’s $6.9 billion in secured loans, the three state pension funds argued the sale to Fiat unlawfully rewarded unsecured creditors ahead of secured lenders.

The Pensions had taken their case to New York federal bankruptcy judges and to an appeals court but their argument was rejected. The case was then taken to the Supreme Court, the highest court in the U.S. Although Ginsburg has put the sale on hold, he did not indicate how long the delay would last.

Both Chrysler and the Obama administration have said a long delay could kill the deal and end up with Chrysler’s liquidation. Fiat can walk away from the deal if it does not close by June 15.

The verdict could set a precedent for General Motor’s bankruptcy, which is using a similar strategy as Chrysler.

Source: Reuters

2 Responses

1. ferozza says:

   June 9, 2009 at 6:29 am

   wew… nice
2. Anonymous says:

   June 9, 2009 at 8:59 am

   How is it nice? Chrysler might die if the deal doesn't go through soon.

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