New York A U.S. appeals court on Friday upheld Chrysler’s sale of most of its assets to Italy’s Fiat, but the deal will remain on hold to allow an appeal to the nation’s highest court.
The 2nd U.S. Circuit Court of Appeals said it will continue to delay the sale until 3 p.m. CDT Monday, unless the U.S. Supreme Court intervenes. The three-judge appeals court panel was expected to release a written ruling later Friday.
Thomas Lauria, an attorney representing the trio of Indiana state pension and construction funds that appealed the sale, said his clients will keep pressing their objections.
“We will be going to the Supreme Court to see if we can get some time to get this case considered by them,” Lauria said after an afternoon appeals court hearing.
The Supreme Court will decide in the coming days whether to issue its own stay in the case, and possibly take up the appeal, or let the appeals court stay expire and allow the sale to go through.
The Indiana State Police Pension Fund, the Indiana Teacher’s Retirement Fund and the state’s Major Moves Construction Fund claim the deal unfairly favors the interests of the company’s unsecured stakeholders ahead of those of secured debtholders such as themselves.
The funds also challenged the constitutionality of the Treasury Department’s use of Troubled Asset Relief Program, or TARP, funds to supply Chrysler’s bankruptcy protection financing. They say the Treasury did so without congressional authority.