Chrysler LLC sold after Supreme Court hold lifted
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NEW YORK (Legal Newsline)-Troubled U.S. automaker Chrysler LLC was sold Wednesday to Italian automaker Fiat SpA, a day after a U.S. Supreme Court hold was lifted.
The Chrysler sale was stalled Monday by Associate Justice Ruth Bader Ginsburg amid a lawsuit filed by three Indiana pension funds that complained the deal unfairly favors interests of Chrysler's unsecured stakeholders over debt holders, including the funds.
Under the sale, Fiat, Italy's biggest manufacturer, will own 20 percent of Chrysler Group LLC and a 35 percent stake if certain operating milestones are met, while the U.S. government will hold 8 percent and Canada will own 2 percent, the companies said in a statement.
The U.S. government will loan the new Chrysler $4.7 billion. The loan plus interest is to be repaid within eight years. The government gave Chrysler $3.3 billion to buttress the company through its Chapter 11 bankruptcy process.
Fiat Chief Executive Officer Sergio Marchionne, 56, will lead the new company. He said Chrysler Group plans to reopen Chrysler factories that were idled during Chrysler LLC's bankruptcy.
"Those Chrysler operations assumed by the new company that were idled during this process will soon be back up and running, and work is already underway on developing new environmentally friendly, fuel-efficient, high-quality vehicles that we intend to become Chrysler's hallmark going forward," Marchionne said.
Chrysler expected to name C. Robert Kidder, chairman and CEO of private investment firm 3Stone Advisors, LLC, as its new chairman.
From Legal Newsline: Reach staff reporter Chris Rizo at firstname.lastname@example.org.
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