Jun 09 2009
Ginsburg Stays Chrysler-Fiat Deal
Supreme Court Justice Ruth Bader Ginsburg today delayed the completion of Fiat’s acquistion of Chrysler after appeals from public employees who paid for tens of millions of dollars’ worth of Chrysler bonds with pension funds. In addition, some consumer advocates warned that discharging Chrysler from bankruptcy would render pending litigation moot.
A majority of the nine-member court is required to overturn the deal. However, Ginsburg–who is the justice to whom people in Indiana go with last-minute pleas (each justice covers a region of the U.S.)–wants to take some time to consider the arguments.
Chrysler expects to finish the Chapter 11 bankruptcy reorganization process shortly. Its agreement with Fiat expires June 15, meaning the Italian automaker may walk away from the deal next week should it remain in the courts. Fiat officials said they don’t expect to abandon their plan of acquiring Chrysler and entering the American auto market but the possibility is present.
Pensioners, such as teachers and firefighters, are concerned the bankruptcy court will reduce their $42 million in outstanding bonds to $12 million. Consumer groups say letting Chrysler hide from lawsuits through bankruptcy is unfair.
