A US bankruptcy court will likely rule tomorrow on whether to allow the sale of US auto giant Chrysler to a group led by Italy’s Fiat, the presiding judge said.
Speaking on Friday at the close of three days of marathon hearings, Judge Arthur Gonzalez said: “My plan is to issue an opinion sometime Monday.”
The judge had been widely expected to rule on Friday after lawyers backing and opposing the US-government-crafted rescue plan for Chrysler plan completed their final arguments.
The third-biggest US automaker filed for bankruptcy protection on April 30 and is seeking a tie-up with Fiat in a plan presented as the only way to save the company from liquidation.
Creditors, parts suppliers, dealership owners and others losing money in the bankruptcy argue that their rights have been trampled in the effort to force through the deal.
Legal appeals were expected if Gonzalez ruled in favor, meaning possible new delays. Fiat has said it might back out if the transaction is not completed by June 15.
Thomas Lauria, an attorney for pension funds attempting to stop the bankruptcy, said the plan was “illegal” and stripped his clients of their protections as provided under bankruptcy law.
“The planned process is being completely short-circuited,” he told the court as he opened what were expected to be lengthy closing arguments by lawyers for the various sides.
A lawyer representing some of the 789 dealers who face being shut down accused Chrysler choosing the victims in an unbusiness-like way that equated to “throwing darts at a board.”
But speaking for Chrysler, attorney Corinne Ball said there had been no other way out other than accepting the government plan for partnership with Fiat.
“The context for Chrysler is accelerating erosion of value,” she said. “There is no other alternative than liquidation.”
The developments in Chrysler are critical for General Motors (GM).
The largest US automaker was widely expected to file for bankruptcy protection ahead of its deadline tomorrow imposed by US President Barack Obama’s administration, which is providing GM with emergency cash and may put as much as 72.5 percent of the country’s biggest automaker under state ownership, according to documents filed by GM on Thursday.
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