WASHINGTON — Supreme Court Justice Ruth Bader Ginsburg has delayed Chrysler's sale of most of its assets to a group led by Italy's Fiat, but she didn't say how long the deal would remain on hold.
Ginsburg said Monday in an order that the sale is "stayed pending further order," indicating that the delay might only be temporary.
Chrysler LLC has said the sale must close by June 15, or Fiat Group SpA has the option to walk away, leaving the Auburn Hills, Mich., automaker with little option but to liquidate.
A federal appeals court in New York approved the sale Friday but gave opponents until 4 p.m. Monday to try to get the Supreme Court to intervene. Ginsburg issued her order right before the deadline.
Ginsburg could decide on her own whether to end the delay, or she could ask the full court to decide. It is unclear when she or the court will act.
Chrysler said it had no comment until it receives further information from the court.
Chrysler claims that the agreement with Fiat is the best deal it can get for its assets and is crucial to the company's plan to emerge from Chapter 11 bankruptcy protection.
But a trio of Indiana state pension and construction funds, which hold a small part of Chrysler's debt, have fought the sale, claiming that it unfairly favors Chrysler's unsecured stakeholders ahead of secured debt holders like themselves.
As part of Chrysler's restructuring plan, the automaker's secured debt holders will receive $2 billion, or about 29 cents on the dollar, for their combined $6.9 billion in debt. The Indiana funds bought their $42.5 million in debt in July 2008 for 43 cents on the dollar.
The funds also are challenging the constitutionality of the Treasury Department's use of money from the Troubled Asset Relief Program to supply Chrysler's bankruptcy protection financing. They say the government did so without congressional authority.
Consumer groups and individuals with product-related lawsuits also are contesting a condition of the Chrysler sale that would release the company from product-liability claims related to vehicles it sold before the "New Chrysler" partnered with Fiat is created.
Individuals with claims against "Old Chrysler" would have to seek compensation from the parts of the company not being sold to Fiat. But those assets have limited value, and it's doubtful that there will be anything available to pay consumer claims.
The appeals come as Congress intensifies its scrutiny of the Obama administration's government-led restructuring of Chrysler and General Motors Corp. The Senate Banking Committee said it planned to call a senior adviser to the auto task force and the Obama administration's director of recovery for auto communities and workers to a hearing Wednesday.