AUBURN HILLS,
Mich. — Chrysler LLC announced
Friday that it gained approval from the U.S. Bankruptcy Court to sell all of the company's assets.
Chrysler argued in its motions that it is imperative that the process be
completed expeditiously in order to secure the maximum value for Chrysler’s
stakeholders through the Chapter 11 process. Given the stress on all aspects of
the automotive industry and the current idling of Chrysler’s manufacturing
facilities, Chrysler said that key relationships with suppliers, dealers, and
other business partners cannot be preserved if the sale process is not
concluded quickly.
In addition, Chrysler noted that substantial new financial commitments from the U.S. and Canadian governments require the consummation of a transaction with Fiat
within 60 days and make DIP financing available for only that period. The
recently announced agreements with the UAW and CAW providing for modifications
to the collective bargaining agreement for active employees and for a new
schedule of contributions to a VEBA that will provide retiree medical benefits
is also conditioned on the expeditious consummation of the Fiat transaction.
While Chrysler has already conducted discussions with Nissan, GM, Volkswagen,
Tata motors, Magna, GAZ, Hyundai, Honda and Toyota and others over an extended period of
time, these discussions have not produced any viable alternative to the
proposed alliance with Fiat.
Nevertheless, Chrysler provided in its filings for an orderly and fair process,
approved by the Court, that will confirm that the Fiat transaction represents
the best and highest bid for Chrysler’s assets, or promptly identify any other
higher and better alternatives. To be successful, an alternative bidder would
have to surpass the value of the terms of the agreement with Fiat.
As part of this process, a Sale Notice will be circulated widely, and notice
will also be published in major newspapers to provide opportunity for any
interested party to emerge. The Court has set May 20 as the deadline for the
submission of bids; May 26 as the deadline for the notice of designation of
lead bidder; and May 27, 2009 as the date for the Sale Hearing to consider the
approval of the proposed sale.
The Chrysler Chapter 11 case was filed on April 30, 2009, in the U.S.
Bankruptcy Court, Southern District of New York. The case number is 09-50002,
with the Honorable Arthur J. Gonzalez presiding. More information about
Chrysler's restructuring is available at www.ChryslerRestructuring.com.
