U.S. Supreme Court Puts the Brakes on Chrysler-Fiat Deal
June 08, 2009
WASHINGTON -- The U.S. Supreme Court has put on hold Chrysler's proposed deal to be
taken over by Italy's Fiat. The move pushes forward Chrysler's emergence from Chapter 11 bankruptcy and puts the Fiat deal, which expires June 15, at risk.
It also calls into question if General Motors, which followed Chrysler into bankruptcy, might face similar roadblocks.
Associate Justice Ruth Bader Ginsburg of the nation's highest court ruled Chrysler cannot yet transfer most of its assets to Fiat until more information is gathered and a hearing held on the subject.
The case was brought by three Indiana state pension and construction funds, which hold $42.5 million of $6.9 billion in Chrysler secured loans, had not been properly heard.
"I'm delighted it appears we will be getting our day in court," Indiana state treasurer Richard Mourdock said in an interview on CNBC.
Last week, a federal appeals court in New York allowed the Chrysler transfer of assets to Fiat but ordered the "sale" -- though Fiat is bringing no cash to the deal -- be put on hold until 4 p.m. Monday to let the pension funds seek Supreme Court intervention.
Ginsburg ruled the sale "stayed pending further order" of the Supreme Court.
"As George W. Bush learned from his 'Mission Accomplished' debacle, there's always a danger in declaring victory prematurely," commented Edmunds.com CEO Jeremy Anwyl.
"The real question is: What does this mean for GM?" he added. "GM may not have followed Chrysler into bankruptcy if it hadn't appeared to be going so smoothly."
Posted by Michelle Krebs at 1:34 PM under Chrysler , Featured , News | Comments (0) | digg this | Seed Newsvine
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