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When the U.S. Supreme Court delayed the sale of Chrysler to Fiat yesterday it put the whole contract in jeopardy, giving the Italian automaker the opportunity to walk away if the sale isn’t approved by June 15th. Fiat CEO Sergio Marchionne has, however, confirmed his commitment to the purchase, saying that it would not deter him.
“We would never walk away,” he said in an interview with Bloomberg. “Never.”
Late Monday afternoon Supreme Court Justice Ruth Bader Ginsburg delayed the sale but did not make clear the intentions of the court. A group of Indiana pension funds have attempted to block the sale of Chrysler to a Fiat-run group (also comprised of the U.S. and Canadian governments) by alleging that the initial bankruptcy court acted contrary to the law by putting the needs of unsecured lenders ahead of secured ones (some of which include the pension funds).
The bankruptcy court’s decision was upheld by an appeals court and now the matter may go before the Supreme Court.
It is not guaranteed that the Supreme Court will heard the case but that is the speculation.
All we do know is that Fiat has an unwavering interest in the Chrysler brand and the U.S. market. This is likely due to Marchionne’s belief that in a post-recession auto industry there will be far fewer major players controlling significantly larger shares of the market.
[Source: Automotive News]
A U.S. Supreme Court judge has delayed the sale of Chrysler to a new Fiat-run company. The move by Justice Ruth Bader Ginsburg came just before a 4 p.m. deadline set by a New York appeals court would have seen the sale completed.
The statement by Justice Ginsburg was just one sentence and gave no mention if or when the Supreme Court would hear an appeal by several Indiana pension funds which are challenging the sale. Representatives of those pension funds have just lost an appeal and were said to be looking to take their challenge to the U.S. supreme court. The group is arguing that by permitting the sale of Chrysler to Fiat the bankruptcy court acted contrary to the law by putting unsecured lenders ahead of secured ones.
The Obama administration has pressured the Supreme Court against delaying the sale of Chrysler saying that such a move could have “grave consequences,” namely, the liquidation of Chrysler’s assets. If the sale of Chrysler to the Fiat-led group (which also includes the U.S. and Canadian governments) does not transpire by June 15, Fiat is able to walk away.
[Source: Automotive News]