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Supreme Court dismisses Indiana challenge

by David Zatz on

Indiana’s treasurer was dealt a final defeat by the United States Supreme Court, which dismissed three state pension funds’ challenge to the sale of 20% of Chrysler (escalating to 35% of Chrysler) to Fiat.

Republican State Treasurer Mourdock had the Indiana State Police Pension Trust, the Indiana State Teachers Retirement Fund and the Major Movers Construction Fund, which held Chrysler senior secured debt, challenge the sale repeatedly. After paying 43 cents on the dollar for risky loans, the funds issued numerous legal challenges at receiving 29 cents on the dollar, though the alternative through a Chapter 7 bankruptcy would likely have been far less. No other buyers expressed a serious interest in Chrysler.

The group was represented by the law firm of White & Case, and has reportedly paid over $2 million for its legal challenges.  (See this legal analysis of the challenge.)

Indiana’s pension funds held a total of $42.5 million of the debt, and appear to have lost around $30 million on the deal.

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