June 8, 2009
Ginsburg briefly holds up Chrysler deal
Justice Ruth Bader Ginsburg Monday temporarily blocked the sale of Chrysler LLC to Fiat to give the rest of the U.S. Supreme Court time to hear a stay request.
A U.S. appeals court in New York had upheld a bankruptcy court ruling allowing the sale to go through. The appeals court stayed the effects of its own ruling till 4 p.m. Monday to allow challengers time to approach the Supreme Court.It takes the votes of five members of the nine-member court to issue a permanent stay. Ginsburg oversees the 2nd U.S. Circuit, which includes New York.
Lawyers for three Indiana state pension funds have petitioned the Supreme Court to block the sale of Chrysler to improve the return on their investments.
The funds represent about $42 million of Chrysler's $6.9 billion in debt. Under the government-backed plan, creditors would receive 29 cents on the dollar. But, attorneys representing the funds have argued several laws were ignored to hasten Chrysler's exit from bankruptcy court.
Chrysler filed for bankruptcy April 30 and is seeking to complete a sale of most of its assets to Fiat by June 15, when Fiat has the option to back away from the deal.