The administration of President Barack Obama has asked the United States Supreme Court not to block the sale of automaker Chrysler to Fiat, White House sources said on Monday.
The sale of the Detroit No.3 to the Italians has been contested by a group of Indiana pension funds which hold $42 million of bankrupt Chrysler's $6.9 billion debt, or less than 1%.
The sale was to have been finalised this week and Fiat will be able to pull out of the deal if it is not concluded by June 15.
Previous attempts by the creditors to block the sale in bankruptcy court have failed.
Should the Supreme court decide to take up the case, not only will the sale to Fiat risk falling through, but this could have an important effect on the fate of Detroit No.1 General Motors, which has also filed for bankruptcy.
Fiat has negotiated with Chrysler and Washington to obtain an initial 20% and management control of the American automaker in exchange for its cutting-edge green and small car technology as well as access to Fiat's sales and service networks in Europe and Latin America.
The stake will rise to 35% once benchmarks are met in the US, including producing Fiat and Alfa Romeo models in Chrysler plants.
Fiat has an option to take a majority stake in Chrysler once federal bail-out loans have been repaid.
