Supreme Court Holds Up the Chrysler/Fiat Etc. Deal
Update on what Damon Root and Jacob Sullum were blogging on earlier today, regarding Indiana pension funds' court challenge to the sale of Chrysler to Fiat, the UAW, and the U.S. and Canadian government in possible violation of existing bankruptcy laws and the legal status of TARP funds: the Supreme Court has declared a (temporary) "no" to the deal. From Bloomberg:
Chrysler LLC's planned asset sale to a group led by Italy's Fiat SpA was delayed by Justice Ruth Bader Ginsburg while the U.S. Supreme Court considers a request for a longer postponement that might scuttle the deal…
A federal appeals court in New York last week allowed the sale, while putting its decision on hold until 4 p.m. today to let opponents including Indiana pension funds seek Supreme Court intervention.
Ginsburg's one-sentence order today said the bankruptcy court orders allowing the sale "are stayed pending further order" of the Supreme Court. That language leaves open the possibility that the justices might clear the deal to go forward in the next several days….
The pension funds sought a stay that would last until the full nine-member court decided whether to hear their appeal. The funds said in court papers they would suffer "irreparable harm" should the sale go forward.
Chrysler said the sort of stay sought by the funds "will, in practical effect, kill the Fiat sale and lead to a liquidation."
The Obama administration, which is supporting the automaker at the Supreme Court, played down the impact of Ginsburg's order. An administration official who spoke on condition of anonymity said the stay is intended to give the court enough time to make a determination on the merits of the request.
For much, much more on the legal, constitutional, historical, and practical problems with the U.S. government's swift takeover of the auto industry, see our forthcoming Reason magazine cover feature in our August/September issue, out in early July.