On Monday Supreme Court Justice Ruth Bader Ginsburg put the future of the Fiat/Chrysler purchase in doubt by issuing a stay on the sale. Three Indiana pension funds are suing, claiming the bankruptcy is unfair to lenders such as themselves, while favoring other lenders who took less risk. Unfortunately for Chrysler, they had until June 15^th to complete the sale or Fiat could walk away.

Today, however, Fiat is sticking to their guns.

Italian automaker Fiat said Tuesday it will not turn its back on a deal to acquire a controlling stake in Chrysler despite a U.S. Supreme Court stay on the sale.

Under terms of the agreement, Fiat has the option to abandon the deal if it is not completed by June 15.

“Fiat won’t walk away from Chrysler,” Fiat spokesman Gualberto Ranieri said.

If Fiat does walk away, then Chrysler will have basically no choice to liquidate. While Fiat seems committed to the purchase, at this point, anything is possible.

UPDATE: Supreme Court will not block the sale.

Internal confusion seems to be the topic of the day at Chrysler. Yesterday, the company proudly trumpeted that Fiat, the Italian automaker, would take on 35% of Chrysler’s U.S. Government debt as part of their strategic alignment.

While the move of Fiat partnering with Chrysler made very little business sense to me, the thought of Fiat taking on debt seemed even odder. Hey, what do I know – I’m not an automotive executive.

But maybe I should be…

The Italian automaker Fiat said Friday that it won’t assume Chrysler LLC debt — current or future — in deal for a 35 percent stake, contradicting statements from Chrysler that it would.

The Fiat Group statement said it “intends to make absolutely clear that the proposed alliance will not entail the assumption of any current or future indebtedness to Chrysler.”

The lifeline Chrysler currently is feeding off of may come to a quick end in a matter of weeks as the company needs to show the U.S. government how they expect to return to profitability. With confusion on the Fiat deal coming into the mix, Chrysler may now have an even harder time supporting their claim of viability.