After making it through Chapter 11 bankruptcy restructuring in just over 30 days, Chrysler was expected to be sold to Fiat almost immediately. But Indiana state pension funds appealed to the Supreme Court on Tuesday requesting a hold on the sale. The lenders said the bankruptcy court did not spend sufficient time analyzing the money lent. In total these three lenders issued $42 million in loans but will receive only $0.29 for every dollar lent in the restructure.
Supreme Court Justice Ruth Bader Ginsburg grated the pension funds request to stall the sale, but later the Supreme Court said the deal could move forward as planned. The momentary hiccup will not stop the deal from being completed by Fiat's June 15 sale deadline. Fiat's CEO has been quoted previously as saying he has no problem letting the deal go under.
Fiat will hold a 20% stake in the new company, Chrysler Group LLC. The US government will own 9.9%, the Canadian government will own 2.5%, with the rest being held by the United Auto Workers.
This combination of US, Canadian and union ownership is also likely to be utilized in the GM restructuring. The US government will own 60% of the company when it rises from the bankruptcy restructuring.
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