U.S. Supreme Court Asked to Block Sale of Chrysler Assets
On Saturday, the U.S. Supreme Court was asked to block the sale of Chrysler assets to Italian automaker, Fiat, by two groups. One group, consisting of Indiana state pension and construction funds argues that the terms of the sale favor unsecured creditors at the expense of secured stockholders and that the use of TARP funds to finance the bankruptcy is unconstitutional.
The second group protesting the sale is a group of individuals that claim the terms of the sale would limit their ability to recover in product liability actions filed against Chrysler. Last Monday, in a ruling that outraged many consumer rights advocates, the bankruptcy judge overseeing the Chrysler bankruptcy ruled that Fiat could not be held liable for product defects in Chrysler vehicles.
Justice Ginsberg has the authority to isse or reject a stay herself or refer the application to the full U.S. Supreme Court.
