WASHINGTON (Reuters) — Indiana pension funds and consumer groups asked the U.S. Supreme Court Sunday to stop the sale of bankrupt automaker Chrysler LLC to a group led by Italian carmaker Fiat SpA while they challenge the deal.
The separate requests, which moved the legal battle to the nation’s highest court, were filed after a U.S. appeals court in New York approved Chrysler’s sale to a group led by Fiat, a union-aligned trust and the U.S. and Canadian governments.
The Chrysler case could set a precedent for General Motors Corp (GMGMQ), which is using a similar quick sale strategy in its bankruptcy in New York.
The appeals court late Friday stayed the closing of the sale until Monday afternoon, giving the pension funds and other opponents time over the weekend to ask the Supreme Court to block the sale while they appeal.
The three state pension funds, which hold about $42 million of Chrysler’s $6.9 billion in secured loans, argued the sale unlawfully rewarded unsecured creditors such as the union ahead of secured lenders.
Source: http://tinyurl.com/MoneyCnn-ChryslerUSSC
Excerpt from Indiana Pensioners’ Application for Stay:
The Indiana Pensioners are comprised of the Indiana State Police Pension Trust and the Indiana State Teachers Retirement Fund, pension funds that are fiduciaries for the investment of billions of dollars of retirement assets for approximately 100,000 Indiana civil servants, including police officers, school teachers and their families, and the Indiana Major Moves Construction Fund, an infrastructure construction fund, all of whom are holders of Chrysler First Lien Debt (as defined below). certain lenders party thereto (the “First Lien Lenders”). The First Lien Lenders are owed $6.9 billion (“First Lien Debt”), of which the Indiana Pensioners hold $100 million, all of which is secured by a first lien on substantially all of Chrysler’s assets (the “Collateral”).
Source: http://online.wsj.com/public/resources/documents/indiana.pdf
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