After a federal appeals court upheld a lower court’s approval to sell most of Chrysler’s assets to Fiat, three Indiana state pension funds appealed the ruling to the United States Supreme Court. The three Indiana funds represent teachers and police personnel and hold about $42.5 million of Chrysler’s $6.9 billion in debt. The funds were demanding greater compensation for Chrysler’s secured debt, and argue that Chrysler might have received a better outcome through liquidation rather than by the Fiat offer. The sale of Chrysler’s assets had been stayed until Monday, June 8, 2009. Late in the afternoon on Monday the Supreme Court agreed to delay the sale until a hearing on the appeal by the three Indiana state funds could be heard, thereby raising questions as to the outcome of Chrysler’s bankruptcy case.
After many months of uncertainty, General Motors filed for bankruptcy this morning. The company was forced into filing by the President who believes it is necessary to temporarily do this in order to save the troubled automobile maker. GM hopes to end up with 3,600 dealers instead of the 6,000 it has now and they will not be renewing franchise agreements when they expire in 2010.
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