Supreme Court Halts Chrysler Sale to Fiat

The Supreme Court on Monday granted an emergency appeal asking it to halt the impending government-backed sale of Chrysler to Italian automaker Fiat.

The order stops for now Chrysler’s sale, which the company claims could scuttle the deal.

Justice Ruth Bader Ginsburg signed the order, but it may be only temporary.

A federal appeals court in New York had earlier approved the sale, but gave opponents until 4 p.m. ET Monday to try to get the Supreme Court to intervene. Ginsburg issued her order just before 4 p.m.

The complaint stems from the administration’s decision to favor unsecured debtors (and unions) over secured debtors, who bankruptcy and contract law grants the first place in line.  It remains to be seen whether the five Supreme Court members necessary to sign off on hearing the case will act or the temporary halt will expire, but for now we can praise justice Ginsburg for at least feigning an interest in the importance of rule of law and economic rights.

SCOTUSblog on what the stay might mean:

* Ginsburg may have decided to share the decision on what to do with her eight colleagues, and they needed more time to think or talk about it.

* Members of the Court may have decided that they wanted to give some explanation, or perhaps some may have decided to dissent and wanted a chance to prepare a statement saying so.  In the meantime, it was her task, as the Circuit Justice, to impose a limited stay.

* 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, indicating that such an explanation would come “in due course,” although the expectation was that one or more opinions would emerge from those judges on Monday.

The wording of Ginsburg’s order — “stayed pending further order” — is the conventional way by which a Justice or the Court carries out an action that is expected to be short in duration, and not controlling — or even hinting at — the ultimate outcome.  Any speculation that her order meant the Court was leaning toward a further postponement would be unfounded.