Just as one Detroit automaker enters bankruptcy, it looks as though another will emerge from its Chapter 11 filing. Judge Arthur Gonzalez – the presiding judge in the Chrysler case — has reportedly approved the sale of Chrysler to a new entity led by Italy’s Fiat.
According to Reuters, Judge Gonzalez has approved the $2 billion sale of the ‘good’ Chrysler to a new entity. Set to be renamed Chrysler Group LLC, the new company will be 68 percent held by the UAW’s Voluntary Employee Benefit Association, 20 percent owned by Fiat 12 percent controlled by the U.S. and Canadian governments.
Judge Gonzalez deemed that the only alternative to a Chrysler sale would have been Chapter 7 liquidation. “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,” he said in a statement.
Several groups threw up objections to the sale of Chrysler late last week, but Gonzalez ultimately overruled all complaints.
Although Chrysler Group LLC will be clear of Chapter 11 protection, Chrysler LLC will likely remain in bankruptcy for another two years.
