The Supreme Court threw a wrench into the plans to have a quick bankruptcy process at Chrysler LLC, delaying the company’s combination with Italian automaker Fiat.
The bankruptcy judge overseeing the Chrysler case had given approval for the company’s most valuable assets, such as plants, dealerships and contracts, to become part of a new company in which Fiat would hold a significant stake.
Supreme Court Justice Ruth Bader Ginsburg, in an order issued late Monday, granted a request for a delay of that approval sought by Indiana state pension funds, which had argued that they and other lenders deserved better treatment by the bankruptcy court.
No reason for the delay was given in the order, and there were no details about how quickly the issue could be resolved by the nation’s highest court.
The Obama administration has stated that Chrysler is no longer viable as a standalone company and that it must join with Fiat in order to justify additional federal tax dollars needed to keep the company alive.
Chrysler’s top executives have argued in court filings that a long delay in approving a deal with Fiat could kill the company by forcing its suppliers to go out of business and leaving dealers without the parts they need to repair Chrysler vehicles on the road.
Chrysler said it had no comment about the Supreme Court’s ruling. Fiat could not immediately be reached for comment.
(Source: CNN)
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One Response
It’s surprising they don’t merely require the UAW and the Federal Government to leave enough assets to make Indiana whole (everyone else accepted the deal), and let the sale proceed and litigation can takes its normal slow pace.