[JURIST] A federal bankruptcy judge on Sunday approved the sale of most of the assets currently held by Chrysler Group to Italian automaker Fiat S.p.A. [corporate websites]. Judge Arthur Gonzales of the US Bankruptcy Court for the Southern District of New York [official website] approved a bankruptcy plan that would transfer 55 percent of Chrysler to a United Auto Workers (UAW) [union website] retiree trust and 20 percent to Fiat, with the US and Canadian governments each retaining a minority share. The UAW trust would take over responsibility [agreement, PDF] for retiree health care in exchange for a larger ownership stake in the restructured Chrysler. A group of Indiana pension funds that acquired $42.5 million in secured Chrysler debt last year said they would appeal [WP report] the decision because it is unfairly biased toward unsecured creditors like UAW.
Chrysler filed for bankruptcy protection [case materials] in April under Chapter 11 [text] 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.