The US Supreme Court has today given the green light for a government-backed sale of bankrupt manufacturer Chrysler LLC to a group led by Italy’s Fiat. The losers in the ruling were Indiana pension funds and other opponents who fought to delay the deal while they challenge Chrysler’s sale.
Many in the industry believe the Chrysler case will be used a precedent for any upcoming legal challenges with General Motors, which is hoping for a similar quick-sale strategy.
President Obama’s administration was concerned that had the deal been delayed by prolonged legal battles, the offer would fall through, meaning Chrysler would go into liquidation and 38,000 people would be out of a job..
The struggling US carmaker is currently losing a staggering US$100 million (A$125-million) a day! The Fiat led group expects the sale agreement to be signed by June 15.
In other news, another US court has granted Chrysler permission to dump 789 dealerships across America. The ruling means the rejected dealers can no longer sell any existing inventory, provide repairs or use the Chrysler name or trademark.
The existing vehicles from rejected dealers will be reallocated to stores ran by the new Fiat-led Chrysler once the sale has finalised.