U.S. court seen clearing Chrysler sale to Fiat
At the end of 2008 FIAT had a “Market Cap” of 15 Billion dallars. FIAT is currently worth 6 Billion and on the verge of bankruptcy in Europe – Why the rush through the American Court system – who is making Billions on the back of American Tax payers? Why “push” a “politically spun” Bankruptcy through the Courts to the advantage of Obama’s “Big Dollar Contributors” and at the expense of pension funds and workers across this country?
NEW YORK (Reuters) – Chrysler looks set to clear its last major hurdle in its sprint through bankruptcy court as soon as Thursday, when a judge is expected to overrule more than 340 objections and approve its sale to a group that includes Fiat.
Less than 30 days after it filed for bankruptcy, the automaker seeks approval to sell its stronger operations to a “New Chrysler” owned by Italy‘s Fiat (FIA.MI), labor and the U.S. and Canadian governments, in exchange for $2 billion paid to its lenders.
Ten hours of hearings on Wednesday centered on cross-examining Chrysler’s former president and vice chairman, Tom Lasorda; financial advisor Robert Manzo of Capstone Advisory Group; and Alfredo Altavilla, the chief executive of Fiat’s powertrain business.
That testimony will be used in Thursday’s hearing, when hundreds of objections to the sale will be heard. The judge said the hearings might stretch into Friday.
Those opposing the sale include the nearly 800 dealers Chrysler wants to shutter, as well as debtholders and retirees. Suppliers, which are owed more than $5 billion, have also objected.
The sale will complete the White House’s goal of reorganizing the automaker in 30 to 60 days, largely thanks to government financing of the bankruptcy and Fiat’s role as a buyer. Chrysler shut its operations when it filed for bankruptcy, which lent weight to the argument that the sale needed to be approved quickly.
The compressed time frame has forced the court to accelerate hearings and cut notice periods short. Lawyers trying to block the sale were scrambling to gather complete depositions on Tuesday as the hearing approached and to dig through hundreds of thousands of documents.
Why have the time frames been cut short? Why is the Obama Administration preventing a proper review of the documents and a normal examination of the records and competing claims? At what cost to Taxpayers and investors? At who’s cost and who will benefit?
The sale would free the automaker of $6.9 billion in loans and cumbersome retiree benefits that it blamed for its struggles against more nimble competitors. By teaming up with Fiat, Chrysler could expand beyond the U.S. market and diversify a product line now heavily weighted toward trucks and SUVs. Please! FIAT is near Bankruptcy and has never had a market for it’s cars in the US – How is this transfer of US Tax Payer money going to change these facts? Why is the Obama Administration giving FIAT Chrysler and shipping Billions in taxpayer dollars to Italy? Why isn’t FIAT putting up any cash in this deal? Why are US Taxpayers baing asked to fund a delay in FIAT’s bankruptcy?
Much of the questioning focused on whether Chrysler explored alliances with automakers aside from Fiat and the role of the U.S. Treasury.
The government provided more than $8 billion in emergency loans to Chrysler before the bankruptcy and nearly $5 billion financing to carry it through the Chapter 11 reorganization, which has proven contentious. That is right, $13 Billion in taxpayer money to a priavtely owned company worth less than $1 Billion! (Market Cap = Outstanding Shares Of Company Stock x price per share = Market Cap. GM’s market “cap” is under $1 Billion, Chrysler “net worth” is less than 1/2 that amount!.http://www.thetruthaboutcars.com/ford-market-cap-4x-gm/ What type of common sense or business acumen is being applied here? Who is stealing this money from the American Taxpayer?
Manzo testified that banks rejected an offer from Chrysler prior to bankruptcy to swap their secured debt for half the equity in a restructured Chrysler. The banks chose instead to negotiate only with the government.
Glenn Kurtz, an attorney for White and Case which is representing Indiana pension funds opposed the sale to Fiat, read a March email in which Manzo appeared to cheer a proposal from the government to eliminate the banks secured debt after they rejected Chrysler’s offer of an equity stake.
The hearings started with Gonzalez rejecting a request to postpone the hearings to give more time to opponents, including the Indiana funds, to review the “hundreds of thousands” of documents received in the last few days as part of the discovery process.
That discovery process turned up one email that seemed to show Chrysler’s attorneys from the Jones Day firm questioning the government’s demand for a tight schedule for the sale process. The email called the accelerated schedule a mistake that risked the loss of credibility and threatened to “stuff the judge.”
Filed under: Auto Industry, Auto Industry Bailout, Chrysler Bankruptcy, Chrysler Bankruptcy Manipulation, Chrysler LLC, Economic Crisis, Economic Recovery | Tagged: Chrysler Bankruptcy, Equity Investors Beware - Obama Administration changes Rules On The Fly, Obama Administration Manipulating Bankrupotcy Laws | 1 Comment »