Reuters reported that the high court, in a brief order, instructed the 2nd U.S. Circuit Court of Appeals to dismiss as moot the pension funds’ appeal.
Fighting the government-backed Chrysler sale to Italian carmaker Fiat SpA were the Indiana State Police Pension Trust, the Indiana State Teachers Retirement Fund, and the Indiana Major Moves Construction Fund (see Pension Funds Lose Effort to Stop Chrysler Sale).
The sale closed June 10, a day after the Supreme Court originally rejected an emergency request from the pension funds to put the deal on hold while they challenged it as an unlawful reorganization plan. The pension funds’ challenge revolved around whether it was proper to allow the company to quickly sell off its assets without undergoing a normal bankruptcy reorganization process that is, in part, designed to protect the rights of creditors.
According to the Reuters report, attorneys for the pension funds said in the appeal to the Supreme Court, “The sale of Chrysler’s assets has closed and the distribution of value to its creditors has occurred, but the issue of the transaction’s legality is not dead.”
“On its face, this deal smacks of the sort of insider favoritism that the bankruptcy code was designed to prevent,” the pension funds added, asserting that the “transaction was nothing more than a way for the government to pick winners and losers from among Chrysler’s claimants.”
« Uptick in Ford Business Prompts Benefits Replacement