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Supreme Court steps aside on Chrysler-Fiat deal but questions remain

The legal issues raised in the case against the deal are likely to arise again with General Motors.

Newscom

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The US Supreme Court action Tuesday that cleared the way for the reorganization deal between Chrysler and Italian automaker Fiat did not resolve any of the potentially significant legal issues raised against the deal.

Instead, the high court went out of its way to emphasize that its decision simply lifted the temporary stay entered on Monday.

"A denial of a stay is not a decision on the merits of the underlying legal issues," the court said in an unsigned two-page order. It added: "Our assessment of the stay factors here is based on the record and proceedings in this case alone."

Groups objecting to the Chrysler-Fiat alliance raised questions about using government bailout money and bankruptcy laws to speed completion of the deal.

The Supreme Court action lets stand the decision of a bankruptcy judge and a three-judge appeals court panel. But it does not signal an endorsement by the court of the legal reasoning in those decisions.

Nonetheless, an Obama administration official hailed the action as an important legal victory. "We are gratified that not a single court that reviewed this matter, including the US Supreme Court, found any fault whatsoever with the handling of this matter by either Chrysler or the US government," the official said.

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