Supreme Court Temporarily Blocks Chrysler Sale
Ruth Bader Ginsburg put a hold on the Chrysler bankruptcy deal, potentially undermining the deal that would sell Chrysler assets to Fiat. The stay was requested by Indiana pension funds who “said in court papers they would suffer ‘irreparable harm’ should the sale go forward,” according to Bloomberg. Here is the text of the order in full (one sentence—does all caps count as yelling in Supreme Court orders?):
Supreme Court of the United States
INDIANA STATE POLICE PENSION TRUST, ET AL.,
CHRYSLER LLC, ET AL.
UPON CONSIDERATION of the application of counsel for the
applicants, and the responses filed thereto,
IT IS ORDERED that the orders of the Bankruptcy Court for the
Southern District of New York, case No. 09-50002, dated May 31 and June 1,
2009, are stayed pending further order of the undersigned or of the Court.
There’s some debate about how serious this endangers the Chrysler deal. The Bloomberg article cites Obama administration downplaying it, saying that it’s just a short delay so the court can assess the merits of the plaintiffs’ request. SCOTUSblog seems to agree, saying that the wording of the order “is the conventional way by which a Justice or the Court carries out an action that is expected to be short in duration, and not controlling–or even hinting at–the ultimate outcome.” Yves Smith at Naked Capitalism seems to make more of it, citing a WSJ article according to which the gov’t and Chrysler had “warned such an intervention might lead to the liquidation of the auto maker.”
See this online article we posted a couple of weeks ago indicating alternative paths for Chrysler and the U.S. auto industry.