June 7, 2009

Supreme Court asked to delay Chrysler deal

Three Indiana public employee funds Sunday asked the U.S. Supreme Court to delay Chrysler's sale to Fiat.

In an emergency filing, the state's Police Pension Fund, Teacher's Retirement Fund and Major Movers Construction Fund contend the sale unfairly favors Chrysler's unsecured debt holders over those of secured debt holders, like themselves.

The funds, which hold about $42 million of $6.9 billion in secured loans to Chrysler, also accused the U.S. Treasury of acting unconstitutionally in using federal bailout funds to rescue Chrysler.

The public is watching and needs to see that, particularly, when the system is under stress, the rule of law will be honored and an independent judiciary will properly scrutinize the actions of the massively powerful executive branch, the funds said in the filing.

A federal appeals court in New York Friday approved Chrysler's plan to sell most of its assets to Fiat as part of the Detroit automaker's plan to emerge from bankruptcy protection. The appeals court stopped the Chrysler plan from proceeding until 4 p.m. Monday, or until the Supreme Court rejected any delay, whichever came first.

The funds' request for a delay first goes to Justice Ruth Bader Ginsburg, who can rule on her own or refer the matter to the full court.