Chrysler, which filed for bankruptcy on April 30, has won U.S. bankruptcy court approval for the sale of substantially all of its assets to Fiat SpA. The news comes just hours before GM is expected to begin its Chapter 11 filing.
“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,” Judge Arthur Gonzalez wrote in a 47-page opinion.
The Obama administration has promised $6 billion to the new Chrysler Group LLC that will make Chrysler, Dodge, Jeep and eventually Fiat vehicles.
The new company will be owned 68 percent by the UAW, 12 percent by the U.S. and Canadian government and 20 percent by Fiat. Fiat is eventually expected to increase its share to over 50 percent.
Bob Nardelli has stepped down as company CEO and will hand over his responsibilities to C. Robert Kidder who will be Chairman of Chrysler Group LLC.
– By: Omar Rana