Chrysler LLC won court approval to sell most of its business to a group led by Italy’s Fiat SpA, a deal intended to fire up its idled manufacturing plants and resume an 84-year history of selling American cars. U.S. Bankruptcy Judge Arthur Gonzalez approved Chrysler’s sale in a ruling last night in Manhattan. The sale faced more than 300 objections. Gonzalez overruled those that weren’t withdrawn or resolved. The approval came hours before General Motors Corp. filed for bankruptcy protection in the same court.
Chrysler is selling itself to an entity owned by Fiat, a union benefit trust, the U.S. Treasury and the Canadian government. The Auburn Hills, Michigan-based company will get $2 billion in cash to distribute to secured lenders holding $6.9 billion in loans. Turin-based Fiat can walk away from the sale if it isn’t completed by June 15, with a one-month extension for antitrust approvals. The company didn’t receive any other bids for its assets, attorneys said. “Not one penny of value of the debtors’ assets is going to anyone other than” lenders who deserve it, the judge wrote in the 47-page ruling.
The U.S. and Canada “have made the determination that it is in their respective national interests to save the automobile industry, in the same way that the U.S. Treasury concluded that it was in the national interest to protect financial institutions,” Gonzalez said.