Legal News

Breaking: Supreme Court Grants Stay of Chrysler/Fiat Ruling

By Ashby Jones

This just in: The Supreme Court has granted a stay of the Second Circuit’s approval of the Fiat/Chrysler deal. Click here for the order, from Justice Ruth Bader Ginsburg via Scotusblog; here and here for earlier posts on the issue.

The lower court’s approval of the deal will be stayed to give the court time to consider whether to hear an appeal on the merits. A group of pension funds had sued to keep the deal from going through, alleging that the Treasury Department’s use of TARP funds to partially finance the deal was improper.

According to Scotusblog, Justice Ginsburg’s action “had almost no legal significance.” It simply means that the deal remains in limbo until Ginsburg, as the Circuit Justice, or the full Court takes some definitive action. Scotuslog throws out a few possible rationales behind Justice Ginbsurg’s move, including that Ginsburg or the court may be waiting to see how the Second Circuit explains its decision to uphold the terms of the sale. The Circuit Court issued no opinion on Friday.

The WSJ’s Michael Corkery, over at Deal Journal, points out that Ginsburg herself has said that only “extraordinary” situations call for stays like this.

Fiat can walk away if the deal isn't completed by Monday, June 15.

Owen Pell at White & Case is representing the pension funds. Repping Chrysler: Corinne Ball and others at Jones Day.

Full post as published by Law Blog - WSJ.com on June 08, 2009 (boomark / email).