Court Approves Chrysler Bidding Procedures

Despite the opposition of some of Chrysler's lenders, the Manhattan bankruptcy court approved the company's bidding procedures. This will allow the American manufacturer to step up the sale of its assets, most of them to Fiat.

In motivating his decision, judge Arthur Gonzalez was quoted by Reuters as saying that the accelerated sale was "appropriate and necessary" due to the fact that "there is an urgent need for the deal to be consummated."

As we said, part of Chrysler's lenders opposed the move, calling the rapid sale as being an "absurdity". The lenders, who call themselves Chrysler's "non-TARP lenders," claim that the approved sale procedure preclude anyone but the US government from bidding for the company's assets. The opposition of the lenders was dismissed by the judge based on the fact that "these lenders do not have grounds for (their identity) statement to be sealed."

A second group of lenders are already preparing their take on Chrysler. Law firm Kramer Levin Naftalis & Frankel was hired by the group to represent them in their case.

According to Inside Line, Chrysler has already divided its assets into what they now call "OldCo" and the New Chrysler. The OldCo assets are those who will be sold, and they include the Sterling Heights assembly plant, St. Louis North, St. Louis South, Conner, Newark, Twinsburg, Kenosha and Detroit Axle.

"The major assets remaining in OldCo would include eight manufacturing facilities, and related machinery and equipment, with a book value of $2.3 billion," Robert Manzo said in court. "The 363 balance sheet analysis anticipates that certain plant and facility assets would be left behind in OldCo and closed by 2010."
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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