Pension funds seek to block Chrysler sale
U.S. Supreme Court building
WASHINGTON (Legal Newsline) - Three Indiana state pension and construction funds asked the U.S. Supreme Court on Sunday to block bankrupt Chrysler LLC's sale to Fiat.
The Indiana State Police Pension Fund, the Indiana Teacher's Retirement Fund and the state's Major Moves Construction Fund say Chrysler's pending deal to sell its assets to Italy's Fiat Group SpA unfairly favors interests of Chrysler's unsecured stakeholders over debt holders, including the funds.
Additionally, the funds have challenged the legality of the U.S. Treasury Department's use of money from the Troubled Asset Relief Program to bankroll Auburn Hills, Mich.-based Chrysler's bankruptcy protection financing.
The three pension funds hold about $42 million of Chrysler's secured loans.
"The negative economic consequences of permitting an unlawful sale to proceed may well over time dramatically outweigh Chrysler's short-term harm," the funds said in court papers.
U.S. Bankruptcy Court Judge Arthur Gonzalez of the Southern District of New York approved the troubled automaker's sale last Sunday. The Second U.S. Circuit Court of Appeals stalled the sale on Tuesday, allowing the funds to appeal the bankruptcy court's decision.
The emergency request Sunday from the funds went to U.S. Supreme Court Associate Justice Ruth Bader Ginsburg, who handles such matters from New York. Ginsburg can act on her own or refer it to the entire court.
A stay from the high court would require the votes of five of the nine Supreme Court justices.
From Legal Newsline: Reach staff reporter Chris Rizo at email@example.com.
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