UPDATE 8:29 p.m.Â Word was circulating in Washington and New York Tuesday night that the Chrysler deal could be wrapped up as early as Wednesday morning, with the electronic transfer of funds to pay Chrysler for most of its existing assets.
Ending more than three days of intense, round-the-clockÂ and high-stakes legal maneuvering in the Supreme Court, the Justices on Tuesday evening without dissent removed a legal obstacle to sale of the troubled auto industry giant, Chrysler.
Â Insisting that it was denying a postponement “in this case alone,” theÂ two-page order said the challengers had not met their burden of showing that a delayÂ was justified.Â The reference to this case alone perhaps was a signal that the Court did not want its order to appear to give advance clearance for any other government rescue plan — such as that to save another auto company, General Motors.
The order allows a closing of the deal by no later thanÂ next Monday, because it lifts a temporary stay that Justice Ruth Bader Ginsburg had issued on Monday; she did so,Â apparently, onlyÂ to give the Court time to ponder the issue.
Presumably, the closing could occur before next Monday, since that was the “end date” only in the Chrysler agreement.Â
The Court said nothing about the biggest issue lurking in the case: the legality of using federal “bailout” money to pay for the rescue of an auto manufacturer.Â In fact, the order stressed that “a denial of a stay is not a decision on the merits of the underlying legal issues.”
Justice Ginsburg opted to share the postponement question with her colleagues, and the Court appeared to be unanimous in letting the sale occur with a massive infusion of money from the U.S. government, plus a contribution from the Canadian government, to keep Chrysler from what they said was imminent collapse.
With the company losing an estimated $100 million a day, with tens of thousands of workers’ jobs said to be in jeopardy, and with no other rescuer on the horizon, the defenders of the plan pleaded with the Justices to act swiftly, and they did, only about three hours after all of the legal papers were in hand.
As a result of the order, and the underlying transaction it allows, “old” Chrysler will now cease to exist, to be succeeded by “New Chrysler” — a Delaware-based but global firm with the Detroit company wedded toÂ the Italian auto firm, Fiat, known to be a specialist in small, fuel-efficient auto technology.
Investors who loaned Chrysler billions, of which the company still owed $6.9 billion, will now get to split up $2 billion in a government-financed purchase by the new company.Â In return for putting up nearly $12 billion in public funds, the U.S. and Canadian goernments get a share of ownership in New Chrysler, along with other new owners, including a health care benefit fund for Chrysler’s retired workers.Â Fiat gets a one-fifth block of ownership, but cannot seek a controlling share until the governments are paid back.
The Court had been drawn into the sharp controversy, focused on a host of legal issues ranging from basic constitutional questions to discrete, technical questions of bankruptcy law, after the Second Circuit Court last Friday had cleared the “Fiat Transaction,” as it has come to be called, at least by lawyers.Â (The Second Circuit Court still has not issued an opinion explaining its action.)
The first papers filed in the Supreme Court arrived just minutes before midnight Saturday, and there had been a steady flow of legal documents reaching the courthouse on Capitol Hill every day since.Â Justice Ginsburg set off a wave of speculation, some of it well wide of the mark, by issuing a brief order Monday afternoon temporarily staying the transaction.Â Suggestions in several quarters that her delay might have meant that the Court was signaling that it mightÂ hear the challengers’ case and decide it proved to be entirely without foundation.
By the time the full Court’s order emerged shortly after 7 p.m. Tuesday, it immediately was apparent that the Court had taken its time primarily to craft a legally precise order of four paragraphs.Â It very likely was composed largely in Justice Ginsburg’s chambers.Â She is noted for the highly refined, technical care with which she composedÂ legal papers.
MostlyÂ in paraphrase,Â here is what those paragraphs said:
First, the three delay requests filed by three Indiana teacher, police and construction worker benefit plans (08A1096), by a variety of consumers groups (08A1099), and by Patricia Pascale, a widow suing for her husband’s asbestos-related death (08A1100), were denied, and Ginsburg’s temporary order was lifted.
Second, stressing that it was not ruling on the merits of these challenges, the Court listed the factors that govern whether a stay, or delay, would be granted.Â Â Among those are whether four Justices would agree to hear the case on the merits, whether there was “a fair prospect” the Court would overturn the lower court ruling (here, a decision of a bankruptcy judge in New York), and whether “irreparable harm” would result if no stay were granted.Â This paragraph added that, “in a close case,” the opposing rights and needs of each side would be balanced against each other.
Third, the Court stressed that no one had a right to a delay, since that was a matter of “judicial discretion.” It added that the party seeking the stay had the burden of justifying it, and concluded: “The applicants have not carried that burden.”
Finally, it stressed that the matter was one to be examined on the basis of a particular case, requiring “individualized judgments in each case.” It closed with this: “Our assessment of the stay factors here is based on the record and proceedings in this case alone.”