WASHINGTON - Supreme Court Justice Ruth Bader Ginsburg yesterday delayed Chrysler's sale of most of its assets to a group led by Italy's Fiat, but didn't say how long the deal would remain on hold.
Ginsburg said in an order that the sale was "stayed pending further order," indicating that the delay may only be temporary.
Chrysler L.L.C. 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. yesterday 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.
Chrysler said it had no comment until it received further information from the court.
Chrysler says the agreement with Fiat is the best deal it can get for its assets and is critical to the company's plan to emerge from Chapter 11 bankruptcy protection.
But three Indiana state pension and construction funds, which hold a small part of Chrysler's debt, have fought the sale, saying it unfairly favors Chrysler's unsecured stakeholders ahead of secured debtholders like themselves.
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.
Joining in the plea for a stay were attorneys for 170 people with injury or wrongful-death claims against Chrysler, who said the bankruptcy judge had violated their constitutional rights when he approved a sale to Fiat without requiring it to assume liability for defects in vehicles sold by the old Chrysler.
One of the lawyers, Barry Bressler, of Philadelphia's Schnader Harrison Segal & Lewis L.L.P., said many of the victims had suffered lifelong, debilitating injuries because of the defects, and would be left with little recourse if the automaker escaped responsibility.
Bressler said the 170 claimants had total claims worth about $615 million against Chrysler that would be wiped out if the deal went through unchanged.
He said the committee expected to file a joint petition today asking for a full Supreme Court review, in conjunction with consumer groups and lawyers representing people with asbestos claims related to work on Chrysler brake linings.