June 9, 2009
Barely twenty-four hours after issuing a stay against the sale of Chrysler Automotive to Italian automakers Fiat, the Supreme Court lifted its hold and has cleared the sale to proceed.
The temporary stay issued by Supreme Court Justice Ruth Bader Ginsburg on June 8 was overturned in a two-page order issued by the Court today. The Court made no comments on the ultimate legality of the sale, suggesting that the delay was only to give them time to ponder the issue.
The Court also said that the petitioners for the stay had not sufficiently justified the need for it in the light of circumstances.
The Chrysler deal was orchestrated by the White House and drew fire from Wall Street because Chrysler's senior debt holders received less of the company than the United Auto Workers Union health fund.
A group of Indiana bondholders sued to block the sale, forming an odd alliance with consumer groups who opposed Chrysler's attempt to exempt itself from "lemon laws" for its existing vehicles in the bankruptcy. Both Chrysler and Fiat said the "New Chrysler" would honor its "lemon law" obligations.
