Appeals court denies injunction in Chrysler sale; emergency appeal filed with Supreme Court

As we noted on Friday, a group of Indiana pension funds had filed a case with the 2nd Circuit Court of Appeals seeking an injunction to prevent the sale of Chrysler’s assets to a new Chrysler/Fiat partnership, claiming that the bankruptcy case violated the law. The appeals court rejected those arguments and now an appeal has been filed with the Supreme Court:

An appeals court in New York approved the sale Friday, but gave objectors until Monday afternoon to try to get the Supreme Court to intervene. Chrysler LLC wants to sell the bulk of its assets to a group led by Italy’s Fiat Group SpA as part of its plan to emerge from bankruptcy protection.

The emergency requests went first to Justice Ruth Bader Ginsburg, who handles such matters from New York. She can act on her own or refer it to the entire court.

The Indiana State Police Pension Fund, the Indiana Teacher’s Retirement Fund and the state’s Major Moves Construction Fund claim the deal unfairly favors the interests of Chrysler’s unsecured stakeholders ahead of those of secured debtholders such as the funds.

Unless Justice Ginsburg or the Supreme Court as a whole decides to intervene in the case, the appeals court ruling will go into effect on Monday afternoon and the final sale should be made official quickly thereafter.