Supreme Court puts hold on Chrysler sale; deadline a week away

June 8, 6:35 PMNY Autos ExaminerNick Yost

Previous Next

Comment Print Email RSS Subscribe

Subscribe

Get alerts when there is a new article from the NY Autos Examiner. Read Examiner.com's terms of use.

Email Address   Include other special offers from Examiner.com Terms of Use

 

The Supreme Court delayed the sale of Chrysler assets to Fiat Monday in a move that could put the car company on the brink of liquidation.

The order, signed by Justice Ruth Bader Ginsberg put the sale on hold, “pending further order.” That could mean there will only be a short delay, but Italian auto manufacturer Fiat has the right to walk away from the deal if it is not completed by June 15. Ginsburg gave no time frame for when those next orders might arrive.

The delay apparently is result of a last-minute appeal by three Indiana pension funds holding $45 million in Chrysler’s secured loans.

The pension funds believe Chrysler should have sold itself off in pieces because that would have been better for secured lenders. They also contended that the money taken from the $700 billion financial industry bailout to rescue Chrysler was improperly used by the government.

In the brief it filed with the government Monday, the government argued that Chrysler has little value without the Fiat deal, and that the Indiana pension plans did not have standing to object to the deal nor to the government’s $8 billion injection into the new Chrysler-Fiat.