The judge's ruling comes as General Motors /quotes/comstock/13*!gm/quotes/nls/gm (GM 0.75, -0.37, -33.04%) is expected to file under the bankruptcy laws on Monday.
Judge Arthur J. Gonzalez of U.S. Bankruptcy Court for the Southern District of New York approved the plan after ruling that the only alternative to the $2 billion sale of Chrysler's assets was liquidating the company, media reports say.
Under the plan, Chrysler will be controlled 68% by a health-care trust from the United Auto Workers union, 20% by Fiat (FIAT.Y 10.64, -0.40, -3.62%) (IT:F 7.58, +0.07, +0.87%) and 12% by the U.S. and Canadian governments.
Fiat will have the ability to raise its stake to 35% if it meets certain goals and to 51% as Chrysler pays back its government-provided loans, The Wall Street Journal reported.
Chrysler had filed to reorganize under the bankruptcy laws at the end of April. Cerberus Capital Management, the private-equity firm that bought Chrysler in 2007 for $7.4 billion, will see its equity in Chrysler wiped out by the agreement, The Wall Street Journal reported.
Judge Gonzalez rejected arguments from groups that objected to the sale, including Indiana state investment funds, Chrysler dealerships that will close as a result of the deal and others, media reports said.
The new company will be known as Chrysler Group LLC.
No comments:
Post a Comment