WASHINGTON — The U.S. Supreme Court cleared the way Tuesday for the sale of bankrupt Chrysler’s assets to Fiat.
The two-page, unsigned opinion from the high court canceled a temporary stay issued Monday by Justice Ruth Bader Ginsburg and rejected challenges from opponents, including consumer groups and three Indiana pension plans.
Chrysler, which filed for bankruptcy April 30 at the Obama administration’s direction, will now emerge from court protection in as little as 40 days and launch a new era under the day-to-day control of Italy’s Fiat.
The Supreme Court offered little explanation for its ruling, simply saying the challengers, which had sought a full hearing by the court, hadn’t met their burden.
The Obama administration hailed the decision. “We are gratified that not a single court that reviewed this matter, including the U.S. Supreme Court, found any fault whatsoever with the handling of this matter by either Chrysler or the U.S. government,” White House spokeswoman Amy Brundage said.
The high court’s decision came after Fiat, Chrysler and the Justice Department filed briefs Tuesday urging the justices not to accept the case for a full hearing, warning that the company might not survive beyond the end of the month without an approved deal.
Chrysler said the agreement with Fiat would automatically terminate June 15 if the company hasn’t exited bankruptcy.
The Indiana pension funds, a group of secured creditors holding about $42 million in debt, challenged the sale, claiming the Obama administration improperly put unsecured creditors ahead of them. They also fought the use of the $700 billion Troubled Asset Relief Program to fund the auto rescue.
Day one of the new Chrysler Group, as early as today, will be a low-key affair. Fiat chief executive Sergio Marchionne will double as Chrysler chief executive and oversee the day-to-day operations of the company.
The good assets of the bankrupt Chrysler form the basis of the new company, but the management style, right down to product development and manufacturing, will bear the Fiat stamp.
The old Chrysler was not a success and would have collapsed in December if it hadn’t received a $4 billion lifeline from the Bush administration.
The Obama White House concluded in March that Chrysler was too small to survive on its own and ordered it to tie up with Fiat or face liquidation. That followed a fruitless two-year worldwide search for a global partner.
