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Judge OKs rapid sale of most of Chrysler assets
By Emily Chasan and Chelsea Emery |
May 7, 2009, Thursday
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Print Edition
Print Edition
A UNITED States bankruptcy judge has approved the bidding procedures for the rapid sale of most of Chrysler's assets, over strong objections from a group of lenders who called the accelerated timetable an "absurdity."
Judge Arthur Gonzalez, who is overseeing Chrysler's bankruptcy case in Manhattan, said late on Tuesday that the proposed procedures were "appropriate and necessary" given that there is evidence that "there is an urgent need for the deal to be consummated."
The US auto maker, which filed for bankruptcy in New York on April 30, had asked for permission for a quick sale of most of its assets to a new company held by Italy's Fiat SpA, a United Auto Workers union-aligned health care trust and the US and Canadian governments.
"Time is not our friend here," said Corinne Ball, Chrysler's bankruptcy attorney, at the hearing. "Preservation of value means moving ahead of this sale."
The company's net cash balance has fallen to US$260 million from US$1.34 billion over the last three months, said Robert Manzo, of Capstone Advisory Group, which is advising Chrysler.
The ruling came over the objections of a lender group, which had asked the court to block Chrysler's efforts to sell itself, or modify its bidding process to make it more competitive. They said the current sale procedures preclude anyone but the government from being able to bid on Chrysler's assets.
But courtroom testimony demonstrated that "the bidding procedures are intended to encourage bidding from any interested party," said Judge Gonzalez.
Judge Arthur Gonzalez, who is overseeing Chrysler's bankruptcy case in Manhattan, said late on Tuesday that the proposed procedures were "appropriate and necessary" given that there is evidence that "there is an urgent need for the deal to be consummated."
The US auto maker, which filed for bankruptcy in New York on April 30, had asked for permission for a quick sale of most of its assets to a new company held by Italy's Fiat SpA, a United Auto Workers union-aligned health care trust and the US and Canadian governments.
"Time is not our friend here," said Corinne Ball, Chrysler's bankruptcy attorney, at the hearing. "Preservation of value means moving ahead of this sale."
The company's net cash balance has fallen to US$260 million from US$1.34 billion over the last three months, said Robert Manzo, of Capstone Advisory Group, which is advising Chrysler.
The ruling came over the objections of a lender group, which had asked the court to block Chrysler's efforts to sell itself, or modify its bidding process to make it more competitive. They said the current sale procedures preclude anyone but the government from being able to bid on Chrysler's assets.
But courtroom testimony demonstrated that "the bidding procedures are intended to encourage bidding from any interested party," said Judge Gonzalez.
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