Monday, June 08, 2009

Ginsburg Stops Chrysler-Fiat Merger in its Tracks

Right at the 4:00 pm EST deadline today, Justice Ginsburg issued a stay order preventing the Chrysler-Fiat merger going forward. It looks like the appealing Indiana pension creditors are making two arguments.  The first is that TARP doesn't allow the government to invest the funds in a car company.   That one doesn't seem to hold much water, and the Supreme Court isn't going to spend much time on it.  On the other hand, I think at least a plurality of the court would like to examine the second argument, whether the Chrysler deal improperly puts unsecured creditors ahead of secured creditors.  This is a big picture case of a type that could become more common and that could easily avoid review unless the court reaches out and grabs a case.  In other words, I think it's more probable than not that the Supreme Court will keep this case stayed until after the June 15 deadline for the Fiat merger

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