Foes of Chrysler Deal Await Supreme Court Decision

Groups opposed to the government-backed sale of Chrysler are awaiting a Monday afternoon deadline for a Supreme Court decision in what could be a last-chance effort to halt the sale. 

The groups filed emergency petitions in a bid to get the high court to intervene in the sale to Fiat. A stay could eventually lead to a decision striking down the multi-billion dollar sale and place a black mark over the Obama administration's aggressive handling of the economy. That scenario would certainly lead to historical comparisons to the high court's decisions overturning key parts of Franklin Roosevelt's New Deal.  

A decision is expected by 4 p.m. ET. 

Over the weekend, lawyers representing three Indiana public employee pension funds, a collection of consumer advocacy groups and a widow of a Chrysler employee each filed emergency applications to the court asking for more time so they can file additional paperwork arguing why the court should overturn the sale. 

Chrysler's sale is set to move forward Monday afternoon pending the Supreme Court's decision. The emergency appeals have been directed to Justice Ruth Bader Ginsburg, who has jurisdiction in this case. She can unilaterally deny them or refer the matter to the entire court. A stay requires the votes of five justices. 

The parties each argue that the New York bankruptcy judge who approved the sale last week misinterpreted the law. The Indiana pensioners contend the government's handling of Chrysler was a "ploy" to divert Chrysler's assets toward preferred unsecured creditors. 

Sen. Richard Shelby, R-Ala., expressed his frustration Sunday over the Chrysler sale and the administration's overall handling of the auto industry bailout. 

"The bondholders have been sacrificed. The unions have carried the day," he said on "FOX News Sunday." 

The pensioners fear if the sale goes through, it will deprive them and the nation as a whole from getting a fair legal shake at challenging the administration's use of taxpayer money. In their filings, they contend the government without congressional approval "is using the bankruptcy system to re-order private property rights on a scale and in a way that America has never before seen." 

Five consumer rights groups joined in their own petition to the court arguing against the terms of the sale which they say will prohibit all current and future legal claims against Chrysler. They contend the waiver of "successor liability" is a dangerous precedent that will encourage future bankruptcy filings to seek similar arrangements. 

Patricia Pascale is presumably one person whose lawsuit against Chrysler will get tossed out of court by the successor liability provision. Her husband died of asbestos-related lung cancer and she's suing for damages. Pascale's trial is supposed to start next week but her lawyers say the Chrysler sale means her due process rights are being "trampled in a process that bears little resemblance to a fair or orderly judicial proceeding." 

The Obama administration filed paperwork with the Supreme Court Monday asking the justices to deny the emergency relief some of its creditors are seeking. 

In a brief filed by Solicitor General Elena Kagan, the administration cited the New York bankruptcy court's ruling that Chrysler's sale to Fiat is "the only feasible alternative to liquidation of Chrysler's assets" and argued that the Indiana pensioners and others seeking the emergency relief would receive no more money under a liquidation.

Late Sunday, a group of Chrysler interests supporting the sale responded by saying the balance of harms "tilts so overwhelmingly" against a stay. They contend the Indiana pensioners represent only hold a small share of Chrysler's secured debt. They also argue the pensioners have already had their case fully heard in lower courts and that further review by the Supreme Court is unnecessary.