Appeals court upholds Chrysler bankruptcy assets sale

[JURIST] The US Court of Appeals for the Second Circuit [official website] Friday approved the sale of most of the assets of Chrysler Group [corporate website] to Italian automaker Fiat [corporate website; Chrysler/Fiat news release], but said the deal could not be completed until June 8 or until the Supreme Court declines to hear an appeal. The ruling upheld Monday's decision [opinion, PDF; JURIST report] by the US Bankruptcy Court for the Second District of New York [official website]. The deal is opposed by a group of Indiana pension funds that acquired $42.5 million in secured Chrysler debt last year. The funds argue that the agreement is unfairly biased toward unsecured creditors. Lawyers for the funds said they plan to appeal [NYT report].

Chrysler filed for bankruptcy protection [case materials] in April under Chapter 11 [text; Chrysler factsheet, PDF] of the US Bankruptcy Code after failing to negotiate the return of $6.9 billion in debt for $2 billion in cash with secured debt holders. The other members of Detroit's "Big Three" automakers have also faced financial troubles recently. General Motors [corporate website] filed [JURIST report] for bankruptcy [petition, PDF] on Monday. Ford Motor Company [corporate website] is seeking to regain lost market share [WSJ report] while its domestic rivals are involved in bankruptcy proceedings.

 

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