Chrysler Corp. could emerge from bankruptcy reorganization as soon as Monday, after barely a month in Chapter 11 protection, according to a story in the Wall Street Journal.
Barely a month after entering Chapter 11 bankruptcy protection, Chrysler Corp. could emerge as soon as Monday, according to a story in the Wall Street Journal.
The story, written by Alex P. Kellogg, says Judge Arthur Gonzalez of the U.S. Bankruptcy Court in Manhattan, rejected arguments from some Chrysler creditors and dealers seeking to block the deal, noting in his 47-page judgement that Fiat SpA was the only viable alternative to the immediate liquidation of the company.
The ruling is viewed as a partial dress rehearsal for the most complex reorganization of General Motors Corp., which is expected to file in the same court later Monday.
Disgruntled Chrysler dealers faced with being dropped by the company and a group of Indiana pension funds had been the main barrier to the company’s court exit following a marathon three days of hearings last week, the story says.
Judge Gonzalez rejected their efforts to block a sale of Chrysler assets to the Fiat-led group.
Fiat would own 20% of the new company, though it could increase its stake to 35% if it meets certain goals, the story says. The United Auto Workers union’s health-care trust would get a 55% stake, while the U.S. and Canada would own 8% and 2%, respectively. Cerberus Capital Management, the private-equity firm that took over the company for $7.4 billion in 2007, will have its equity in the auto maker wiped out entirely.
WSJ Online subscribers may read the full story here.