This afternoon, U.S. Supreme Court Justice Ruth Bader Ginsburg issued an order extending the temporary stay placed by a federal appeals court in New York last week on the sale of Chrysler LLC’s assets to a new company, to be partially owned by Italian automaker Fiat S.p.A., to allow opponents to the sale sufficient time to seek Supreme Court review. Over the weekend, the Indiana State Police Pension Trust, Indiana State Teachers Retirement Fund and Indiana Major Moves Construction Fund filed a petition for immediate stay of the sale orders entered by the Bankruptcy Court for the Southern District of New York last week, arguing that the sale transaction is a violation of federal law. Specifically, the Indiana funds request that the Supreme Court review the following issues: (1) whether the sale transaction constitutes an “illegal sub rosa chapter 11 reorganization plan and violates the longstanding and fundamental rule that first-lien creditors have absolute priority in bankruptcy, and (ii) whether Treasury has the authority to direct the course of, and fund, this bankruptcy through the use of TARP funds under the [Emergency Economic Stabilization Act].” It remains unclear how long the stay will remain in place.
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U.S. Supreme Court Justice Ginsburg delays sale of Chrysler assets
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