BREAKING NEWS: Indiana Pensions Win More Time on Chrysler Challenge

June 8, 2009 ( - Supreme Court Justice Ruth Bader Ginsburg put a temporary hold Monday on the deal to sell Chrysler to save it from collapse.

The matter is far from over, however.   That order simply gives Justice Ginsburg- or the full Court – more time to ponder whether to postpone the sale further, or allow it to go forward.   The one-sentence order said that the orders of the bankruptcy judge allowing the sale “are stayed pending further order of the undersigned or of the court.”

According to SCOTUSBlog, it would have taken the votes of five members of the Court to grant a full postponement.  

Several Indiana pension funds – the Indiana State Teachers Retirement Fund, the Indiana State Pension Trust and the Indiana Major Moves Construction Fund – had asked for an emergency stay request from the U.S. Supreme Court after the 2nd U.S. Circuit Court of Appeals in New York approved the acquisition of most of Chrysler’s assets by Fiat (see  Court Gives Indiana Funds More Time to Appeal Chrysler Sale ).  

The pension funds have argued that the proposed sale to Fiat is unconstitutional because it puts the rights of junior creditors ahead of the rights of senior lenders.  The Obama Administration  argued Monday that no court, including the U.S. Supreme Court, has the authority to hear a challenge to the role the U.S. Treasury played in the Chrysler rescue, including the use of “bailout” (TARP) funds. The Indiana debt holders, U.S. Solicitor General Elena Kagan wrote, simply have no right to raise that issue, thus putting it out of the reach of the courts.