Supreme Court Gives Green Light to Chrysler Sale, Fiat Puts Pedal to the Metal and Seals the Deal
After a whirlwind trip to the Supreme Court, the Chrysler-Fiat deal has finally gone through. The deal involved the purchase of the bulk of Chrysler's assets by the Italian automaker, and the creation of a new company outside of bankruptcy protection.
The new company also has significantly less debt, fewer dealerships and reduced labor costs. Fiat CEO Sergio Marchionne becomes the CEO of the new company, Chrysler Group LLC.
Fiat isn't paying any money for the assets, but is instead offering the new Chrysler billions of dollars of its technologies to help the company make the transition to manufacturing smaller cars.
The Supreme Court had stepped in on Monday and delayed the sale while the Court examined appeals by a group of Indiana funds that claimed the deal unfairly benefited unsecured creditors over secured creditors like the funds.
The Court decided late Tuesday not to issue a stay, however, and allowed the deal to continue. The Court, in an unsigned, per curiam opinion, stated that the Indiana funds hadn't hadn't demonstrated that they met the requirements for a stay.
The Court did state, however, that it was not making a ruling on the merits of the case, so the funds could continue to press their case in the hopes of receiving damages. The sale is now a fait accompli, though.
The sale caps a trip in and out of bankruptcy so fast that sportscars would be jealous. Chrysler went from bankrupt to bought in 42 days, which is almost inconceivable for a company of its size. Aggressive intervention by the federal government likely helped to speed the company around the track.
The government's next speed test: GM.
Supreme Court clears way for Chrysler's Fiat sale (AP)
Supreme Court Lets Chrysler Sale Proceed (DealBook)
Fiat Closes Deal for Chrysler's Assets (DealBook)