After a U.S. appeals court approved Chrysler Group LLC’s sales to Fiat last week, Indiana pension funds and consumer groups made an appeal on Friday to stall the sale until Monday afternoon. According to Reuters, pension funds and other opponents asked the Supreme Court on Sunday to stop the sale of Chrysler to Fiat while they prepare to challenge the deal.
Three state pension funds, which hold about $42 million of Chrysler’s $6.9 billion in secured loans, argued the sale to Fiat unlawfully rewarded unsecured creditors such as the union ahead of secured lenders.
“The need for the court to review the profound issues presented by Chrysler’s novel bankruptcy sale far outweighs the cost of delaying,” lawyers for the pension funds and the Indiana attorney general said.
The pension and construction funds are also pointing fingers at the U.S. government, saying that it overstepped its legal authority by providing Chrysler with billions of dollars before putting it into a Chapter 11 filing. Layers say that the bailout money was approved by Congress for the banks and not automakers.
“The public is watching and needs to see that, particularly, when the system is under stress, the rule of law will be honored and an independent judiciary will properly scrutinize the actions of the massively powerful executive branch,” the lawyers said.
– By: Omar Rana