The lawsuit filed in bankruptcy court Friday in Manhattan said six longtime investors wiped out by the scandal together lost life savings of $9 million — the amount on fictitious statements issued by Madoff's defunct firm in 2008.

It challenges rules that could disqualify the plaintiffs from collecting up to $500,000 in government-backed compensation because over the years they withdrew more money — believing it was profit — than they originally invested.

By law, trustee Irving Picard has an obligation "to protect a customer's legitimate expectations of what the broker held in his account — even if the broker never purchased any securities in the first place," the suit argues.

Among the plaintiffs named in the suit filed last week: a 73-year-old New Jersey widow who's been forced to take a part-time job at Macy's to cover basic living expenses; a 76-year-old California man who had to sell his home and move in with his daughter; and an 88-year-old Manhattan woman who lives with her ailing husband of 69 years and has stopped paying medical bills because they need the money for food.

The bankruptcy judge overseeing the Chrysler case had given approval for the company's most valuable assets, such as plants, dealerships and contracts, to become part of a new company in which Fiat would hold a significant stake.

Supreme Court Justice Ruth Bader Ginsburg, in an order issued late Monday, granted a request for a delay of that approval sought by Indiana state pension funds, which had argued that they and other lenders deserved better treatment by the bankruptcy court.

No reason for the delay was given in the order, and there were no details about how quickly the issue could be resolved by the nation's highest court.

During last year's campaign, President Barack Obama indicated that he supported eventually repealing the law, but he has made no specific move to do so since taking office in January. The White House has said it won't stop the military from dismissing gays and lesbians who admit their sexuality.

Democrats who control Congress also are not in a hurry to end the policy, which was made law in 1993. Easing the outright ban on gays in the military caused political trouble for President Bill Clinton and Democratic lawmakers that year, and Obama and his congressional allies want to avoid an issue that would roil the public just as they are seeking support for health care and other initiatives.

The casinos object to a law that forces them to transfer of millions of dollars to ailing horse tracks.

Last year, the state Supreme Court unanimously upheld the law. The high court let that ruling stand Monday without comment.

The renewal of the law in 2008 figures in the case against Blagojevich. FBI wiretaps on telephones in Blagojevich's home and the governor's office showed an alleged effort by the then-governor to shake down a racetrack owner for a sizable campaign contribution while the bill was pending. A lawyer for the owner, John Johnston, has said the contribution was not made.

Four secretly recorded conversations about the issue were played at Blagojevich's impeachment trial in the state Senate.

The separate requests, which moved the legal battle to the nation's highest court, were filed after a U.S. appeals court in New York approved Chrysler's sale to a group led by Fiat, a union-aligned trust and the U.S. and Canadian governments.

The Chrysler case could set a precedent for General Motors Corp, which is using a similar quick sale strategy in its bankruptcy in New York.

The appeals court late on Friday stayed the closing of the sale until Monday afternoon, giving the pension funds and other opponents time over the weekend to ask the Supreme Court to block the sale while they appeal.

The three state pension funds, which hold about $42 million of Chrysler's $6.9 billion in secured loans, argued the sale unlawfully rewarded unsecured creditors such as the union ahead of secured lenders.

"The need for the court to review the profound issues presented by Chrysler's novel bankruptcy sale far outweighs the cost of delaying" a sale, lawyers for the pension funds and the Indiana attorney general said in seeking an immediate stay.

The pension and construction funds also argued the U.S. government, which kept Chrysler afloat with emergency loans before the automaker's bankruptcy and financed its Chapter 11 filing, overstepped its legal authority by using bailout funds Congress intended for banks.

"The public is watching and needs to see that, particularly, when the system is under stress, the rule of law will be honored and an independent judiciary will properly scrutinize the actions of the massively powerful executive branch," the lawyers said.

Kenneth Sodomsky wants the high court to suppress the videos found on his computer, which he had taken into a Circuit City in Wyomissing, Penn., to get a DVD burner installed into it. While the computer was in the store, a worker looked through some of the files and found movie files with "questionable" names referring to boys of various ages. The worker then found a video of a hand reaching toward a penis and called the police.

Police seized the computer, obtained a warrant and found child pornography. Sodomsky moved to suppress the discovery, saying the Circuit City employees had no right to search his computer and show any of its contents to police.

A trial judge agreed, but a state appellate court overturned that decision, saying Sodomsky ran the risk of his illegal files being found and viewed by taking the computer out of his house and to the store.

Circuit City Stores Inc. closed the last of its stores in March.