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Archive for Sunday, June 7, 2009

Court asked to block Chrysler sale to Fiat

June 7, 2009

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— Opponents of Chrysler’s sale to Fiat are asking the Supreme Court to block the deal.

Three Indiana state pension and construction funds filed emergency papers at the high court early today to put the sale on hold so they can pursue an appeal.

The federal appeals court in New York approved the sale Friday, but gave objectors until Monday afternoon to try to get the Supreme Court to intervene. Chrysler wants to sell the bulk of its assets to a group led by Italy’s Fiat as part of its plan to emerge from bankruptcy protection.

The emergency request goes first to Justice Ruth Bader Ginsburg, who handles such matters from New York. She can act on her own or refer it to the entire court.

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.

The government-sponsored reorganization of the U.S. auto industry, including the Chrysler bankruptcy proceedings, “is a matter of incredibly high profile and importance,” the funds said in their request to the high court.

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