The United States Supreme Court has granted a request to delay the sale of Chrysler to a group led by Italian carmaker Fiat.
Three Indiana state pension and construction funds filed papers at the court on Sunday calling for the sale to be halted so they can pursue an appeal.
In a one-sentence order, Justice Ruth Bader Ginsburg, said Chrysler's sale was "stayed pending further order".
No date was given for briefs to have to be filed or whether the Supreme Court would hear the underlying legal challenge to the sale.
The application was made by the Indiana State Police Pension Fund, the Indiana Teacher's Retirement Fund and the state's Major Moves Construction Fund. They hold about $US42 million of $US6.9 billion in secured loans to Chrysler.
The funds argue that the sale of Chrysler unlawfully rewards unsecured creditors ahead of secured lenders and amounts to an illegal reorganization plan.
Chrysler entered bankruptcy protection in April. If the deal is not completed by 15 June, Fiat, which is not paying anything for its 20% stake, has the option of pulling out.
The Chrysler case could set a precedent for General Motors, which is using a similar quick-sale strategy in its bankruptcy in New York.