Supreme Court delays sale of Chrysler to Fiat

POLITICO - By JOSH GERSTEIN & EAMON JAVERS - 6-8-09

The Supreme Court delayed the pending sale of Chrysler to Italian carmaker Fiat Monday, dealing a potential blow to the Obama administration’s hopes for a quick sale of the ailing American giant.
Justice Ruth Bader Ginsburg issued a stay of pending bankruptcy proceedings “pending further order.” The delay could just be a hiccup in the proceedings, or an indication of the Court’s intent to take a more in depth look at the deal. A group of Indiana-based secured debt holders filed suit against the deal, saying they had been treated unfairly by the way the Obama administration structured the bankruptcy.
The White House had no immediate comment on the Supreme Court’s move, but in a brief filed about 10 a.m. Monday, Solicitor General Elena Kagan argued strenuously against a stay. “Blocking the transaction would undoubtedly have grave consequences,” Kagan wrote.
The deal with Fiat sets June 15 as the deadline for the deal to close. After that, Fiat has a right to walk away from Chrysler, setting up a potential political problem for an Administration that has already touted the deal as a success. ...read more...