Using her emergency powers, Supreme Court Justice Ruth Bader Ginsburg put Chrysler’s sale to Fiat on temporarily hold this afternoon just before 4 pm, while the court considers a request by the State of Indiana to review the case and ultimately block the sale.
Late last Friday, the U.S. Court of Appeals for the Second Circuit in New York City said the sale of Chrysler to Fiat SpA could proceed this Monday afternoon unless the Supreme Court intervened by 4 pm.
Chrysler could be losing as much as a $100 million a day as the bankruptcy drags on.
The Supreme Court now has the option to consider the case, and nothing can happen “pending further order” of the Court. The U.S. Supreme Court rarely hears emergency appeals, such as the one coming from Indiana.
A three-judge appeals panel for the Second Circuit dismissed arguments against the Fiat sale from the State of Indiana Friday afternoon, which holds a tiny portion of less than 1% of Chrysler’s debt. This led to today’s request by Indiana that the Supreme Court overturn two lower Federal Courts.
In a brief filed this morning for Ginsburg, the U.S. Solicitor General for the Department of Justice, Elena Kagan, defended the Fiat sale, claiming that creditors would get $2 billion in cash, or 29 cents per dollar of debt, compared with only $800 million in a liquidation that will occur if the Fiat sale falls through. Fiat has given a deadline of June 15th for the transaction to occur, otherwise it will withdraw its offer. (more…)