Chrysler’s Chapter 11 bankruptcy has been quick and surgical – as promised – up until this point, but an appeal by a group of Indiana pension funds has officially delayed the sale of Chrysler to Fiat. The delay was ordered earlier today by Supreme Court Justice Ruth Bader Ginsburg.
A federal appeals court has already approved the sale of Chrysler to Fiat, but a last minute appeal by the pension funds to the U.S. Supreme Court has derailed Chrysler’s speedy exit from Chapter 11. It remains to be seen how long the appeal process will take, but the delay is viewed as only temporary at this point, according to MSNBC.
The Indiana funds – which hold $42 million of Chrysler’s $6.9 billion debt – claim the automaker’s bankruptcy plan unfairly favors unsecured lenders over its secured lenders. Chrysler’s current plan will give secured lenders $2 billion, or about 29 cents on the dollar.
The funds also claim the U.S. government unconstitutionally used money from the Troubled Asset Relief Program to protect Chrysler’s bankruptcy financing.
While the delay is expected to be temporary, it has those at Chrysler sweating a bit. Chrysler’s tentative deal with Fiat includes a clause stating Fiat can exit the deal if no sale is reached by June 15th. If that scenario plays out, Chrysler will be left without a strategic partner, likely leading to the automaker’s liquidation.
06/08, 5:16 PM
posted by:
Borat
I hope those breaks had ABS, and did not put vehicle into tail spin (like most of Chrysler cars tend to perform)/
06/08, 5:22 PM
posted by:
A4
you mean brakes.
06/08, 5:22 PM
posted by:
A4
or maybe not. who the hell knows what you are saying anymore.
06/08, 5:27 PM
posted by:
hangonbig3
Seems appropriate that it all comes down to a liitle ole lady…..used to have a Chrysler…probably drives a Prius now.
06/08, 5:48 PM
posted by:
yarddog82abn
lol….this is better then any soap opera, what do this “group of Indiana pension funds” think will happen Fiat walks away? If Chrysler is forced in to liquidation they won’t even the so called 29 cents on the dollar.
If Chrysler is forced in to liquidation the 1st bill to pay is the bail out money.
Do they relay think they are going to get more money?
The good thing is that this Fiat will own Chrysler and that the “group of Indiana pension funds” will just have to do with what they get.
06/08, 5:51 PM
posted by:
impulsive facts
so the indiana fund, holders of a whopping six tenTHS of a whole one percent of the secured debt, is in a position to petentially call off the whole show…
i’ve always like an underdog story
and chrysler always seemed to fit that story line to a tee
but along comes a rag-tag group of indiana pensioners
suddenly i’m torn!
06/08, 5:52 PM
posted by:
johnnycanuck
Haven’t these people got anything better to do than try to delay the inevitable? You know- like Kirk Kerkorian and death?
06/08, 6:03 PM
posted by:
HavanaRob
It may have something to do with principle and the rule of law. I don’t see this as a financial manoeuvre, more as a precedent-setting judicial review. Looks like the IN people are hosed either way….but at least somebody is stepping up to the plate about the constitutionality of this reckless abuse of power and control that’s currently happening in the govt-vs-private sector.
06/08, 6:19 PM
posted by:
JakeK66
I’m pretty sure they would probably get more out of liquidation than the 29 cents on the dollar they would get now. Liquidation is the natural course for Chrysler, and I still believe it’s the course it should take. This doesn’t mean Fiat wouldn’t be in the US or even not in Chrysler dealers – but they would have to buy what they wanted instead of pretty much being handed over it as it is now. The Ram would live on, so would the Grand Caravan – but probably as Nissans.
06/08, 6:24 PM
posted by:
leftwingagenda
i agree with your thesis that this is a “not so fast” judicial review move…not so much on the “reckless abuse of power and control”, though…
06/08, 6:25 PM
posted by:
elviososa
I hope the court blocks the sale…..where is the law on this deal???
06/08, 6:39 PM
posted by:
gnftr21
I agree with HavanaRob, the Indiana folks would be insane to think they are getting anymore money. In fact if the deal with Fiat falls through they get nothing. And as much as I would hate to see it happen, it may wake everybody up if Chrysler went into chapter 7 liquidation. This whole deal with Chrysler and GM is nuts. I guess what really gets me fired up is why didn’t the Feds just run both these companys into chapter 11 as soon as Chrysler was holding hands with Fiat and they figured out GM was not going to avoid chapter 11. I know hind sight is 20/20 but we could have saved us all “billions and billions” of dollars (say it like Carl Sagen did and at least you get a grin out of it).
06/08, 7:59 PM
posted by:
wbent
No surprises here, the Fiat deal was never meant to happen and I will be surprised if it does, was never the plan as I have pointed out in past posts and called a conspiracy theorist. It is interesting that the Judge is Ruthy and that the plantiff is Indiana’s pension fund……but again just a wacky conspiracy theory.
06/08, 8:48 PM
posted by:
Borat
Yep, they will get significantly more. If lawyers are good and work on commission, they may get back their 40 plus millions. This is pittance relative to the deal, somebody will cough it out (FIAT, UAW, Treasury).
06/08, 10:38 PM
posted by:
Mutant@DCX
it will happen later or sooner
look what I saw today
http://img8.imageshack.us/img8/3746/022ttr.jpg
06/08, 10:58 PM
posted by:
jdasch1
mutant- Is that a Fiat??
06/09, 2:14 AM
posted by:
IVIIVI4ck3y27
“POSTED BY:
jdasch1
mutant- Is that a Fiat??”
That’s a Fiat Panda. Yeah.
06/09, 8:13 AM
posted by:
bigs4610
@Mutant@DCX
look its Big Beaver road!
I’m a Michigander and frequent those parts often
06/09, 10:24 AM
posted by:
CarCzarCdn
Did anyone happen to notice that the picture of the Fiat Panda was taken from the front seat of a Dodge Caliber.
06/09, 12:15 PM
posted by:
RaineMan
Fiat Panda? Looks like a Kia Soul.
06/09, 8:01 PM
posted by:
Mutant@DCX
lol
hey bigs, i just back now from HotRod Power Tour 2009 at Metro Park Beach 2000 cars, party is moving to across from GM Tech Center on Van Dyke and 13, free concert Warren city hall 8pm,