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Friday, June 05, 2009

Courts - 2nd Circuit Refuses to Block Chrysler’s Sale

Updating this entry from this morning, Michael J. de la Merced writes late this afternoon in the NY Times:

A federal appellate court on Friday rejected a bid by Indiana state pension funds to block Chrysler’s sale to Fiat, but left open the door for the Supreme Court to rule on the matter.

The United States Appeals Court for the Second Circuit in Manhattan put the Chrysler deal on hold until Monday afternoon to allow the funds to make their appeal to the Supreme Court.

The appeal was filed by lawyers for the Indiana pension funds, which objected to the sale because they were seeking more compensation for the Chrysler secured debt they hold. A federal bankruptcy court in Manhattan had previously approved the sale, which would transfer most of Chrysler’s assets to a newer, healthier company run by a group led by Fiat.

Richard Mourdock, Indiana’s treasurer, had argued that “Indiana retirees and Indiana taxpayers have suffered losses because of unprecedented and illegal acts of the federal government.”

Amandine Ambregni reports here for AFP:
A US appeals court Friday cleared the way for Chrysler to exit bankruptcy under an alliance with Italy's Fiat, dismissing a challenge from Indiana's state pension funds.

A three-judge panel from Second Circuit Court of Appeals upheld without comment a decision by a bankruptcy judge approving the US government-backed plan to create a new entity to buy the assets of the troubled number three American automaker.

The panel allowed the opponents of the plan until 2000 GMT Monday to obtain any further delay from the US Supreme Court.

The appeals court decision puts Chrysler on the verge of completing its quick exit from bankruptcy protection following a filing April 30 in a plan backed by President Barack Obama's administration to tie the group to Fiat.

Posted by Marcia Oddi on June 5, 2009 05:39 PM
Posted to Courts in general | Indiana Government