Supreme Court clears way for Chrysler sale to Fiat

— -- The Supreme Court on Tuesday night gave a green light to Chrysler's Chapter 11 bankruptcy reorganization and its deal with Italian automaker Fiat.

In an unsigned opinion, the full court refused to grant a stay, or postponement of the deal, sought mainly by three Indiana pension funds that argued that they, as secured creditors, were treated unfairly and that the bailout and bankruptcy process was being handled in an unconstitutional manner.

The Center for Auto Safety, a consumer advocacy group, and an individual, Patricia Pascale, also had asked the high court to halt the deal.

The action stresses that it's not a decision on the merits of the appeals, but that the pension funds and other challengers had not presented sufficient grounds for the court to further delay the bankruptcy court's decisions. "The applicants have not carried that burden," the action says.

That's the last word, barring an extraordinary development. "It's a vote of affirmation for what we've done," White House Chief of Staff Rahm Emanuel told USA TODAY.

It means Chrysler could emerge from Chapter 11 protection as early as today, smaller but presumably healthier, under Fiat management.

It already axed one-fourth of its dealers — 789 — and bankruptcy Judge Arthur Gonzalez made that final Tuesday when he rejected an appeal by some 300 of them.

Supreme Court intervention could have delayed Chrysler's reorganization long enough that the underlying deals with workers, bond holders and others could have unraveled, probably forcing a Chrysler liquidation. Chrysler said it was losing $100 million a day in Chapter 11.

Key was a Monday deadline for closing a deal with Fiat. The Italian automaker is to get 20% of Chrysler in return for sharing Fiat's small-car technology and design.

Fiat CEO Sergio Marchionne caused consternation when he commented Monday that the Italian automaker would "never walk away" from the Chrysler deal, even if the June 15 deadline passed.

The Indiana funds rushed to the Supreme Court, arguing that the comment meant the deadline was phony and could be ignored as a reason to speed through Chapter 11. The funds want more than the 29 cents per $1 of debt that they'd get in the current plan. Supreme Court Justice Ruth Bader Ginsburg on Monday temporarily delayed the Fiat deal at the request of the Indiana interests. Tuesday's action came with no recorded dissent. Ginsburg had referred the matter to the full court.