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 Tuesday, June 09, 2009 |
Chrysler sale delayed temporarily by Supreme Court
Jay Carmella at 7:07 AM ET
[JURIST] US Supreme Court [official website] Justice Ruth Bader Ginsburg [official profile, PDF] on Monday ordered [order, PDF] a temporary stay of the pending sale of Chrysler Group assets to Italian automaker Fiat [corporate websites]. The stay allows [NYT report] the full Court more time to decide whether it will hear the case. Two groups filed emergency requests [JURIST report] with the court over the weekend hoping to stop the sale. One group, which consists largely of union related organizations, alleged that the sale favors unsecured stockholders at the expense of secured stockholders and that the use of Troubled Asset Relief Program (TARP) funds is unconstitutional. The other group claimed that the sale would limit their ability to make products liability claims against Chrysler. The Obama administration filed a brief [text, PDF] Monday arguing that the TARP issue is beyond the reach of the courts. Chrysler and the United Auto Workers (UAW) [briefs, PDF] have also filed briefs in opposition. No timetable was set for the Court's decision.
Last week, the US Court of Appeals for the Second Circuit [official website] approved the sale [JURIST report] of most of the Chrysler Group's assets to Fiat, but said the deal could not be completed until the Supreme Court heard the matter. The ruling upheld a previous decision [opinion, PDF; JURIST report] by the US Bankruptcy Court for the Second District of New York [official website]. The other members of Detroit's "Big Three" automakers have also faced financial troubles recently. General Motors [corporate website] filed [JURIST report] for bankruptcy [petition, PDF] last week. Ford Motor Company [corporate website] is seeking to regain lost market share [WSJ report] while its domestic rivals are involved in bankruptcy proceedings.
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Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible, ad-free format.
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