Court asked to stop Chrysler sale, liberals gnash teeth as another American business gutting halts.

http://news.bbc.co.uk/2/hi/business/8087637.stm

Pension funds opposed to Chrysler's sale to Fiat have asked the
US Supreme Court to block the deal immediately.

Three Indiana state pension and construction funds filed papers
at the court on Sunday calling for the sale to be halted so they
can pursue an appeal.

It comes after a US appeals court approved Chrysler's sale to a
group led by Fiat, a union-aligned trust and the US and Canadian
governments.

Chrysler entered bankruptcy protection in April after falling
vehicle sales.

US carmakers have suffered from a massive slump in sales during
the recession.

Fund assets

The US government has backed its sale to the Fiat-led
consortium, which would see it emerge from bankruptcy.

Fiat would control 20% of Chrysler, while 68% would be owned by
a union trust, and the two governments would share 12%.

However, the pension funds, which hold about $42m (£26.3m) of
Chrysler's $6.9bn in secured loans, are opposed to the sale.

They say it inverts usual bankruptcy practice and unlawfully
rewards unsecured creditors, such as the union, ahead of secured
lenders.

'Critical issues'

The emergency legal request from the Indiana State Police
Pension Fund, the Indiana Teacher's Retirement Fund and the
state's Major Moves Construction Fund goes before Justice Ruth
Bader Ginsburg.

It calls for a block on the sale until 1600 local time in New
York (2100 BST) on Monday.

The judge can act on her own or refer the matter to the full
court, when a vote from five of the nine Supreme Court members
would be needed to put the Chrysler sale on hold.

The legal filings call on the court to "decide critical,
nationally significant legal issues relating to management of
the economy by the United States government".

If the sale is put on hold by the court, the Indiana funds would
then pursue a full appeal.

If the deal is not completed by 15 June then Fiat, which is not
paying anything for its 20% stake, has the option of pulling out.

 

Pension funds opposed to Chrysler's sale to Fiat have asked the

I thought Fiat wasn't going to spend a dime on anything related to their
interaction with Chrysler?

And if anything, that they'd be recieving money from Chrysler to cover
the costs of transferring any assets to US / Canada (or, more likely,
Mexico) as part of re-tooling to build Fiat-based Chrysler vehicles in
north america.

Correct me if I'm wrong, but doesn't the word "sale" pertain to an
exchange of money or currency, as opposed to the words barter, exchange,
or partnership?

It's my understanding that Fiat was not so much "buying" part of
Chrysler, but that it was simply being given a 20% ownership stake in
return for something nebulous called "access". As in access to Fiat's
small car platforms. In other words, Fiat would presumably make their
platform designs and parts supply chain available to Chrysler in
exchange for 20% ownership.

In order for Chrysler to actually execute this plan, they'd have to
spend their own money to tool-up their plants to actually build or
assemble these Fiat-based cars in north america. Fiat will send
absolutely no $$$ to Chrysler to help do this.

So again, the use of the term "sale" here is misleading, unless there
have been new developments and Fiat will indeed send Chrysler some cash.

 

All costs to all parties involved in any of this to be borne by the
taxpayer.

 

Especially after FIAT walks without further obligation on June 15th.

 

But the way that the Fiat - Chrysler deal is structured, there is no
cash changing hands directly between them either now or in the immediate
future as far as I know.

So I don't understand how Fiat is "buying" Chrysler.

Sure, Chrysler is receiving cash from both the US and Canadian gov'ts,
and who knows - maybe Fiat is recieving cash from the Italian gov't.
But none of that cash is crossing the ocean in either direction as far
as I can tell.

What obligation does Fiat have with Chrysler at the moment (other than
vague "sharing" of "technology") ?

And what happens on June 15, and why?