Late Sunday night, U.S. bankruptcy Judge Arthur Gonzalez approved the sale of Chrysler's
remaining good assets to a group that includes the UAW
VEBA health care trust, Fiat
, and the U.S. and Canadian governments. The union will get a 68% stake, Fiat gets 20% and the governments split the rest. Gonzalez over-ruled virtually all objections to the deal on the grounds that the best chance of preserving any value in the assets was to move ahead with the sale. The only other viable alternative was liquidation, which would likely only bring a small fraction of the potential value in keeping the company alive.
Gonzalez cited the public interest as one of the reasons to move ahead with the sale. Because the billions of dollars in loans from the two governments, keeping the company alive it was decided that this course of action was the best opportunity for some repayment. Senior lenders will receive $2 billion, or about .29 cents on the dollar of the debt currently owed by Chrysler. Some 90 percent of the company's senior lenders were reportedly in support of the deal.
The "new" Chrysler will henceforth be known as Chrysler Group LLC.