Supreme Court Won't Block Chrysler-Fiat Deal

After taking a couple of days to decide, the Supreme Court, specifically Justice Ruth Bader Ginsburg, has decided not to block the Chrysler-Fiat deal. The court issued a short statement late today, saying that it was not ruling on the merits of the case, but rather saying that the Indiana funds which were seeking to delay the deal had not proved that it was necessary for the high court to get involved. A deal could be finalized as early as tomorrow morning, experts said.

There had been fear that a delay in closing the deal could lead to its collapse; Fiat had set a June 15 deadline that would let it walk away if the deal was not completed by then. Still, earlier today, a Fiat exec said the automaker was committed to making the deal work, regardless of the completion date. In addition, there were fears that GM's bankruptcy case could have been hurt by a failed Chrysler deal, since the government is using the speedy Chrysler bankruptcy case as a blueprint for the larger, more complex GM bankruptcy.

Also today, the bankruptcy judge in New York approved the plan by Chrysler to jettison nearly 800 dealers. In doing so, the judge said that dealers could file for damages if they wished. In addition, Chrysler said in a hearing today that it would guarantee dealers that it would find someone to take unsold cars off their hands.

Chrysler, Fiat win approval to merge and shed 789 dealers (Detroit Free Press)

Supreme Court Clears Way for the Sale of Chrysler to Fiat (New York Times)

Comments

The FIAT deal was obviously directly related to the collapse of the GM Industry. We know GM could have avoided the terrible fall by consolidating with the current trend of the issues their industry is facing. Bad decisions, indeed.