Yesterday, the U.S. Supreme Court delayed Chrysler’s sale to Fiat SpA as Indiana pension funds and consumer groups challenged the deal. However, Chrysler, Fiat and the Obama administration are celebrating tonight because the Supreme Court has just approved the sale of the Auburn Hills automaker to the Italian company.
In a brief two-page order, the Supreme Court said that those seeking to put the deal on hold “have not carried that burden” to justify such an action.
The approval of Chrysler’s sale to Fiat marks the first time the Supreme Court has dealt with legal issues involving the U.S. government’s power to deal with an economic crisis situation.
So what was the reason for the hold up? Apparently, pension funds argued that Chrysler unlawfully rewarded unsecured creditors ahead of secured lenders. They said that the U.S. Treasury Department overstepped its power by using the bailout finds that were set aside for banks.
The White House had no immediate comment on the action.
– By: Omar Rana