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Monday, June 01, 2009
Courts - "Judge Clears Way for Sale of Chrysler to Fiat"
So reports Michael J. de la Merced of the NY Times in this story:
A federal judge on Sunday night cleared a path for Chrysler to exit bankruptcy by approving a sale of most of the carmaker’s assets to a new entity to be run by Fiat of Italy.Judge Arthur J. Gonzalez of the United States Bankruptcy Court for the Southern District of New York approved the government-backed plan after three days of marathon hearings on the proposal. On Friday, testimony and arguments in federal bankruptcy court in Manhattan lasted nearly 12 hours. * * *
Even with the approval, the deal’s closing could be delayed. Lawyers for three Indiana state funds are expected to appeal the decision. And an automatic 10-day stay is in effect to allow for any appeal, though Chrysler’s lawyers will almost certainly seek to shorten that period.
The three funds, which include pensions for Indiana teachers and police offers, have objected to the sale, arguing that they deserve more than the 29 cents on the dollar that they and other secured lenders will receive as repayment. Chrysler holds about $6.9 billion in secured debt; of that, the Indiana funds hold about $42.5 million, or about 1 percent. They acquired those holdings in July 2008 for 43 cents on the dollar.
Lawyers for these funds have questioned whether Chrysler could have fetched a better deal than the Fiat transaction or through a liquidation.
Other objectors included several groups of Chrysler dealers, representing some of the 789 that will be cut as part of the Fiat sale. These groups argued that Fiat should be forced to accept more dealers, or that the deal should be delayed to give them more time to change Fiat’s mind.
Posted by Marcia Oddi on June 1, 2009 06:02 AM
Posted to Courts in general