Supreme Court Won't Block Chrysler Sale

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WASHINGTON -- Chrysler's got the okay, Tuesday, to close nearly 800 of its dealerships and hand its assets over to Italian automaker Fiat.

The Supreme Court cleared the way for Chrysler's sale, while bankruptcy Judge Arthur Gonzalez approved the company's request to cut 25 percent --or 789-- of its franchise dealers.

Click play to watch the interview with Martin Weiss, author of "The Ultimate Depression Survial Guide," about how this decision will affect the auto industry and the economy, following this report.

Both decisions mean no more sales incentives or warranties, and no more cars and trucks for several dealerships across the country.

"It sours me to an extent because I think it's wrong," said Amy Krone, vice president at Orrin B. Hayes. "I think what's happening is wrong."

More than 25 lawyers representing hundreds of Chrysler dealers showed to plead their case before the Supreme Court, but justices say it wasn't enough.

"The applicants have not carried that burden [of proving the need for an appeal]," the court said.

Earlier, one Supreme Court justice put Chrysler's sale on hold, giving some dealers last-minute relief.

"We're excited. It's the first piece of good news we've heard in a while," said Andrew Ricci, the owner of a Dodge dealership in Dearborn, Mich.

Ricci and his father have run their showroom in Dearborn for decades.

The stay bought the Riccis - and others like them - more time to unload their inventory.

"This whole thing has happened pretty quickly - we feel there should be more time to unwind the business we've had for 30 years," Ricci said.

Jeff Carr, a dealership owner in Coralville, Iowa, says the same thing.

"If we had more time to sell them, I wouldn't have to lose $500-$600 per car," he said.

Chrysler was supposed to begin restructuring well before now under bankruptcy protection after its sale to Fiat.

But Justice Ruth Bader Ginsberg threw up a roadblock as a result of a challenge from three Indiana pension funds that stand to lose millions of dollars if the sale goes through.

They argued that the Obama administration, which engineered and helped put the sale to Fiat in the fast lane, overstepped its authority in giving bailout money to Chrysler.

And now, lawmakers on Capitol Hill plan to hold hearings this week on the matter.

"The government's argument is that the harm to Chrysler, which is possibly the loss of the entire business, far outweighs the harm to this group. That's owed a very relatively small amount of money," said Lynn LoPucki from the UCLA law school.

The hurdle won't be cleared until the Supreme Court removes the stay. Time had been a key factor in the transaction.

Chrysler and Fiat had until June 15 to complete the sale, but Tuesday morning, a spokesman for the Italian automaker said Fiat won't walk away even as the deadline for the deal approaches.

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