What's next for the Chrysler sale?

WASHINGTON — Chrysler could cause a judicial traffic jam at the Supreme Court, where the nine justices already confront a congested June calendar.

The justices now being asked to consider Chrysler's future still have 30 decisions left to render by the time their summer vacation starts June 30. The unfinished business includes some of the year's trickiest cases, from reverse discrimination to voting rights.

All of which raises questions, including: What's next for Chrysler and what matters most? Here are some answers.

Q: What's going on?

A: Serious last-second maneuvering. There's a deadline next Monday for the sale of most of Chrysler's assets to a group led by the Italian auto company Fiat. Last Saturday, the Indiana State Teachers' Retirement Fund and other Indiana groups petitioned the Supreme Court to "stay" — temporarily block — the sale. Later, the Center for Auto Safety, the Ad Hoc Committee for Consumer-Victims of Chrysler and other consumer groups joined in, as did Patricia Pascale, who's suing Chrysler in Los Angeles over the death of her husband, a Chrysler employee who died after contracting mesothelioma from exposure to asbestos, allegedly on his job as a brake worker.

Q: Didn't the Supreme Court already block the sale?

A: For a bit. On Monday, Justice Ruth Bader Ginsburg issued a 35-word order blocking the sale "pending further order of the undersigned or of the court." Ginsburg now can decide on her own to impose a longer stay or let the sale proceed. Alternatively, she can bring it before the other justices for a full court consideration.

On big questions, justices often bring in their colleagues, but four justices have to agree for a case to be scheduled for full consideration.

Q: What's the latest?

A: On Tuesday, the consumer groups petitioned the Supreme Court to consider the legal questions involved in the Chrysler bankruptcy and asset sale. For the consumer groups, the key question is who assumes liability for people who are injured in Chrysler cars.

Later, on Tuesday afternoon, Solicitor General Elena Kagan warned that, "If the sale is not consummated by June 15, there is a substantial possibility that Fiat will abandon the transaction or insist on materially different terms."

Barry Bressler, an attorney for the Ad Hoc Committee for Consumer-Victims of Chrysler, said that Ginsburg "has a strong impetus to decide" the issue by Monday and was likely to rule in "the next couple of days."

Q: What are the differences among all these legal filings?

A: The first requests sought to freeze everything in place. The latest filing asks for a full-blown public hearing. Under the court's usual schedule, rarely deviated from, such a hearing wouldn't take place until October. That complicates the court's decision-making, as the passage of so much time could kill any deal.

Q: Long term, what's the Supreme Court being asked to decide?

A: That depends on who's asking. The consumer groups say that the court should address whether corporate liability can be eliminated through bankruptcy proceedings. The Indiana pension groups want the court to consider whether the auto deal improperly rewrites the bankruptcy laws.

Bressler said that the consumer groups' arguments may appeal more to the court's liberal wing, whose members include Ginsburg, while the Indiana arguments about how capital markets rely on current bankruptcy laws may appeal more to court conservatives.

Q: What does the Obama administration want?

A: This problem to go away. Kagan, representing the administration, filed a 26-page brief urging the court not to block the sale. Kagan contended that "applicants' bid to block the sale would force the liquidation of Chrysler, a step whose economic consequences would be so severe that two national governments have committed unprecedented resources to prevent it."


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