Another Historic Event: Chrysler Begins Emerging From Bankruptcy
June 01, 2009
NEW YORK -- A judge in the same New York City bankruptcy court where General Motors
will file for Chapter 11 Monday has approved the sale of Chrysler assets to a group led by Italy's Fiat.
Judge Arthur Gonzalez approved the asset transfer saying, in his written opinion, it was the only alternative to "immediate liquidation" of Chrysler.
"Indeed, because of the overriding concern of the U.S. and Canadian governments to protect the public interest, the terms of the Fiat Transaction present an opportunity that the marketplace alone could not offer, and that certainly exceeds the liquidation value," Gonzalez wrote in a 47-page opinion, as reported by Reuters.
Gonzalez, following three days of hearings last week, rejected nearly every argument made by objectors, including the 789 Chrysler dealers whose franchise agreements are terminated as of June 9, a group of Indiana pension funds that hold Chrysler debt and consumer groups.
The judge did not accept arguments by dealers that Chrysler was unfairly terminating their dealerships. He said such decisions are allowed in bankruptcy court and the move would give the new Chrysler company the best shot at survival. Another hearing on dealer issues is set for this Wednesday, Reuters reported.
The $2 billion sale of the assets will go to a new Chrysler that will be 68 percent controlled by the United Auto Workers' retiree health-care fund. Fiat will control 20 percent. The U.S. and Canadian governments will have 12 percent.
The asset transfers is a major step for Chrysler emerging from bankruptcy. Chrysler filed for bankruptcy on April 30, a move seen as a dry run for the bigger more complex General Motors bankruptcy that is filed on Monday.
Posted by Michelle Krebs at 4:09 AM under Chrysler , News | Comments (0) | digg this | Seed Newsvine
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