Chrysler creditors ask Supreme Court to delay Fiat sale

According to The Wall Street Journal, a group of Indiana pension funds has filed an emergency appeal with the US Supreme Court in an attempt to block the sale of Chrysler to a consortium led by Fiat.


AFP - A group of Indiana pension funds opposed to Chrysler's sale to Fiat has filed an emergency appeal with the US Supreme Court to halt the sale, The Wall Street Journal reported Sunday.

The newspaper said the emergency stay request was filed shortly before midnight Saturday and came after the 2nd US Circuit Court of Appeals in New York approved the acquisition of most of Chrysler's assets by a group led by Fiat.

The stay request asks for the extension of a temporary hold on the sale put in place by the appeals court until 4:00 pm (2000 GMT) Monday or when the high court decides whether to intervene.

"Absent a stay, the court will be deprived of the opportunity to decide critical, nationally significant legal issues relating to management of the economy by the United States government," the paper quotes the pension funds as saying in their application.

Emergency stays are rarely granted by the Supreme Court, the paper noted. But if it were approved, the Chrysler deal with Fiat could be delayed for weeks or months while the issue is pending at the high court because a stay extension would buy time for the pensions funds to lodge a formal appeal at the high court.

Under Supreme Court practices, individual justices field emergency motions and Justice Ruth Bader Ginsburg will handle the filing, the report said.

She could rule herself or refer the motion to the entire court, said the Journal. Ginsburg can also reject the appeal outright or request other parties involved in the case file briefs.

The Indiana pension funds have argued the sale is unconstitutional because it puts the rights of junior creditors ahead of the rights of senior lenders, the paper noted.

The funds also argue the US Treasury Department has overstepped authority given to it by Congress under the Troubled Asset Relief Program by financing Chrysler's restructuring, the report said.

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