Supreme Court Lifts Stay on Chrysler Sale; Judge Clears End of 789 Dealership Contracts
There was some concern for the Chrysler deal when Supreme Court Justice Ruth Bader Ginsburg granted a stay to Indiana state pension funds and others seeking to block the sale, previously cleared by a bankruptcy judge, of the collapsed car company's assets to Fiat, the Italian carmaker whose involvement was thought crucial to the bankruptcy-bailout plan, and other partners. The funds believed they were getting a raw deal and argued that the speeded-up reorganization flouted the integrity of the bankruptcy process.
It's a worthy argument but also moot, as the Court has just cleared the sale. Their order states that the plaintiffs "have not carried the burden" of their case, and added that "a denial of a stay is not a decision on the merits of the underlying legal issues." (pdf here.)
Earlier today a bankruptcy judge gave Chrysler another break, waiving a bankruptcy rule that limits the number of executory contracts a debtor may terminate and allowing Chrysler to abrogate 789 dealership agreements in the U.S. The dealers have until Monday to clear their stock.
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