Updated from Monday, June 8
The U.S. Supreme Court on Monday delayed the bankruptcy court sale of
assets to Italian automaker
In a one-sentence order issued by Justice Ruth Bader Ginsburg, the court said it would stay the sale "pending further order of the undersigned or of the court."
The sale had been appealed by three Indiana state funds. They argued that the bankruptcy court's support of the sale violated a requirement that secured creditors be paid off before unsecured creditors.
Fiat said Tuesday it won't walk away from a deal to acquire a controlling stake in Chrysler despite the Supreme Court stay on the sale.
Fiat has the legal right to walk away from the deal if the sale is not completed by June 15. But a spokesman for Fiat said Tuesday that the automaker will stay on board despite the new delay.
The U.S. Supreme Court decision on Monday to hear a challenge by three pension and construction funds could scuttle the sale. But the delay could also only be temporary. Justice Ruth Ginsburg could decide on her own to end the stay, or ask the full court to decide.
If Fiat were to walk away, Chrysler would have little option but to liquidate.
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.