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Bankruptcy:Wrap-Up

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#1 ·
Chrysler Bankruptcy: Central Wrap-Up

Chrysler was the second largest automaker between 1936 and 1949. It was acquired by Daimler-Benz in 1998, and suffered from poor management and lack of investment until being sold to Cerberus Capital Management. A combination of economic, political, marketing, and product issues short-circuited Cerberus' rapid work on correcting Daimler’s mis-handling of Chrysler; and, while the government was glad to lend trillions of dollars to financial institutions, politicians demanded that President Bush, and then President Obama, allow Chrysler and General Motors to go into an unassisted bankruptcy. Bush made interim loans over the objections of his party leaders, and Obama worked on forming deals to preserve Chrysler and GM. Bankruptcy would have been avoided, but three lenders refused to accept the Treasury's deal, which was admittedly draconian.

The three lenders were Oppenheimer Funds, Perrella Weinberg Partners, and Stairway Capital.

The bankruptcy may be brief, with the White House and Chrysler expecting a sale of core assets within 60 days. Legal expenses are likely to be $1,000 per hour per attorney, with a possibility of losing major assets or, if customers do not rely on government-backed warranties, liquidation if sales plummet and delays occur.

Court papers are available at Chrysler’s site, chryslerRestructuring.com.

Chrysler will sell its principal assets to a new company under Section 363 of the Bankruptcy Code. The new company will, if plans are maintained and no other company outbids them, be the result of the alliance with Fiat and will have the Chrysler, Dodge and Jeep brands, as well as most of Chrysler's current employees and production facilities. Chrysler's current employees will become employees of the new company.

The Treasury will provide up to $3.5 billion in debtor-in-possession financing, and $4.5 billion in exit financing; the Canadian government will provide around $800 million and get 2 percent of Chrysler's equity. $280 million has already been transferred to a program that guarantees Chrysler's warranties, so customers can be more confident in buying cars
from a company in bankruptcy.

The Fiat deal has been finalized and signed. A new board of directors will be created by Chrysler, the government, and Fiat, and Bob Nardelli will return to Cerberus as an advisor once the new company is created; Tom LaSorda will retire during the initial bankruptcy proceedings.

Arthur Gonzalez, one of the nation's most experienced bankruptcy judges, will oversee the bankruptcy proceedings for Chrysler. He handled both Enron and WorldCom's bankruptcies simultaneously; he has a favorable reputation and considerable experience in high-profile cases. The sale of key assets to the Treasury is expected to come very soon in the case, with other decisions possibly continuing for years.

Chrysler will pay $2 billion to its secured creditors. Its unsecured creditors, who are mainly parts suppliers and the BBDO Detroit advertising agency, may be paid more immediately in some cases, depending on what the judge allows.

The top unsecured debtor is Ohio Module Manufacturing, which presumably supplies Jeep components, and is owed $70 million. Ad agency BBDO Detroit was at #2, with $58 million owed. Many of the top ten debtors are instantly recognizeable to Chrysler fans - Johnson Controls (interior parts), Continental Automotive (electronics, ABS, brakes, and more), Cummins, Visteon, New Process, and Denso. Also included are Comau of Michigan and Germersheim Spare Parts of Germany.

GMAC will be the preferred lender for Chrysler’s consumer loans.
Production and plant closings

The newly renovated Sterling Heights Assembly Plant, which makes the Avenger and Sebring, will be closed in or before December 2010. Conner Avenue, Detroit Axle, St. Louis North, Kenosha Engine, and Twinsburg Stamping will also be closed and sold. Sterling Heights will not be included in the New Chrysler but will be leased to it.

Conner Avenue and St. Louis North are not surprising candidates to be left out of the "New Chrysler" since St. Louis has already been closed and Conner Avenue's sale was announced some time ago. Some have expected Twinsburg to be closed as well, and Kenosha production will be replaced by a new Pentastar V6 plant.

From Monday, May 4, through the sale of the “good Chrysler assets,” all Chrysler plants will be closed, though employees will keep their health benefits. If the process takes longer than the expected 60 days to create a new Chrysler holding company, some limited production may restart. During this period, Chrysler will cut its marketing budget by 50%, given that there will be no production.
Companies covered in the petition

sebring96hbg provided a link to Chrysler's actual bankruptcy petition.

Companies covered include Chrysler LLC, Chrysler Aviation, three Dutch divisions, the Chrysler Institute of Engineering, three international corporations, Chrysler Motors LLC, Chrysler Realty, the service contracts companies, Chrysler Technologies Middle East, Chrysler Transport, the vans business (Sprinter), Dealer Capital, GEM (electric cars), NEV, Peapod, TPF Asset and Note, and Utility Assets LLC.

Chrysler’s Mexican, Canadian and other international operations are not part of any bankruptcy filing.

Thanks to Allpar!
Chrysler Bankruptcy
 
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#2 ·
UAW will sell its Chrysler stock

UAW chief says union will sell its Chrysler stock


STERLING HEIGHTS, Mich. (AP) — The United Auto Workers union has no intention of keeping its 55 percent stake in the new Chrysler and will sell the shares to fund a trust that will take over retiree health care costs next year, the union's president said Monday.

Speaking to reporters at a news conference in suburban Detroit, Ron Gettelfinger said the trust, called a voluntary employees beneficiary association (VEBA), will struggle at first. It is starting with $1.5 billion from an existing company health care trust, and will get $300 million from the company next year. The total retiree health care obligation is $10.9 billion for about 82,000 retirees, as well as current workers who eventually will retire.

While he said he is confident in the trust's funding, Gettelfinger warned that the VEBA may need to make additional cuts. Benefits such as dental and vision coverage already have been cut.

"The VEBA will be on life support initially," he said. "We took a lot of risks here."

Although the trust has a seat on Chrysler's new board, it essentially has no voting rights because it must vote with a majority of independent directors, he said. Retirees have the right to object to the VEBA settlement in bankruptcy court.

The union endorsed a deal for Fiat to run Chrysler and potentially take a controlling stake because it was the best option, Gettelfinger said.

"Of all of the alternatives that were out there in front of us, clearly this is head-and-shoulders above anything else," he added.

Gettelfinger said that critics who think the union is getting a better deal than Chrysler's secured debtholders are wrong because the UAW is taking a big risk with Chrysler stock funding the trust. The stock is worthless today, he noted.

"Let's be honest, it's zero today. The equity is going to be stressed," Gettelfinger said. "This isn't about finance, it's about people that expected health care benefits for life."

Gettelfinger said the union made concessions in 2007 and this year that have helped the company, although he would not place a specific number on how much the concessions are worth.

"It is billions and billions of dollars in relief to the corporation from the standpoint of cash flow," Gettelfinger said.

Some of Chrysler's secured creditors, however, are objecting to the deal in bankruptcy court and the UAW's larger ownership stake.

After the automaker and Treasury couldn't come to an agreement with certain debtholders, Chrysler filed for bankruptcy protection Thursday and is trying to emerge in 30 to 60 days as a stronger company that could eventually end up majority owned by Italy's Fiat Group SpA.

Gettelfinger, appearing with UAW Vice President General Holiefield, said he was "optimistic" that Fiat's leadership and production of small cars by at least one Chrysler factory would help. Gettelfinger and UAW officials are planning to travel to Italy in the coming weeks to tour Fiat plants.

The UAW will now turn its attention to General Motors Corp., which has a June 1 deadline to get concessions from the union and bondholders. The UAW reached a tentative agreement with GM in February that cut benefits and wages for new hires, but the task force is asking for deeper reductions.

Ford Motor Co., the only U.S. automaker not receiving government aid, voluntarily reached a modified contract with its union members, who approved the deal in March. Ford renegotiated its contract with the UAW because it didn't want to be disadvantaged with higher labor costs than its U.S. competitors. The $500 million in labor cost savings negotiated by Ford and stock contributions to its VEBA were to serve as a model for GM and Chrysler until the auto task force imposed tougher requirements.

Ford officials have said the company would go back to the UAW should GM and Chrysler cut a significantly higher amount of costs than it recently negotiated.

"We've been hearing a little bit of noise from across town," Gettelfinger said. "Our focus is to take care of retirees and get involved in GM."

LINK:The Associated Press: UAW chief says union will sell its Chrysler stock
 
#3 ·
May 5, 2009

Chrysler LLC Receives Interim Approval for $4.1 Billion DIP Financing and Cash
Collateral of $400 Million



Auburn Hills, Mich. , May 5, 2009 - Chrysler LLC announced that the U.S. Bankruptcy Court yesterday gave interim approval to Chrysler for $4.1 billion of Debtor-In-Possession (DIP) financing, funded by the U.S. Treasury and Export Development Canada, and the use of $400 million of cash collateral, enabling the company to meet its working capital and general business needs going forward.

Approval of Chrysler’s DIP financing provides the company with resources to continue “normal course” business operations pending approval of the sale transaction with Fiat.

The Chrysler Chapter 11 case was filed on April 30, 2009, in the U.S. Bankruptcy Court, Southern District of New York. The case number is 09-50002, with the Honorable Arthur J. Gonzalez presiding. More
information about Chrysler's restructuring is available at Client Home.

About Chrysler LLC
Chrysler LLC, headquartered in Auburn Hills, Mich., produces Chrysler, Jeep®, Dodge and Mopar® brand vehicles and products. Total sales worldwide in 2008 were 2 million vehicles. Outside of North America, 2008 was the second-best sales year in the last decade and the third-best ever for Chrysler International.

Chrysler LLC’s product lineup features some of the world's most recognizable vehicles, including the Chrysler 300 and Town & Country, Jeep Wrangler and Grand Cherokee and Dodge Challenger and Ram.

Reinforcing a commitment to bring to market a broad array of advanced electric vehicles across all its brands, Chrysler has introduced five electric-drive vehicle prototypes since the fall of 2008. At least one of
these vehicles will be produced in 2010 for consumers in North American markets, with European market production later.

The Chrysler Foundation, the company's philanthropic arm, annually supports hundreds of charitable organizations in the United States and throughout the world. In 2008, the Foundation gave approximately $21 million in charitable donations.
 
#4 ·
May 1, 2009

Chrysler LLC Receives Court Approval of “First Day Motions”
Court Authorizes Continued Payment of Employee Wages and Benefits, and Customer
Warranty Programs

Auburn Hills, Mich. , May 1, 2009 -

Chrysler LLC announced today that the U.S. Bankruptcy Court has granted the relief the company requested in a series of court filings known as “First-day motions.” The orders issued by the court will help
the company continue to operate its business during the reorganization proceedings.


Yesterday, Chrysler announced that, as a result of the comprehensive restructuring plan agreed to by many of its stakeholders, it had reached an agreement in principle to establish a global strategic alliance with Fiat
SpA. Chrysler filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court to facilitate the restructuring and alliance.

First-day motions were filed to support Chrysler’s employees, dealers, vendors and suppliers, together with its customers and other stakeholders. The Court granted approval for the company’s request to continue
payment of wages and health and welfare benefits to employees and contractors, and continue its customer warranty programs.


Bob Nardelli, Chrysler Chairman and CEO, said, “We accomplished a great deal today, including approval of certain First-day motions, which will enable us to transition into Chapter 11 and maintain normal
operations as we move forward. Our focus now is on the next steps of this process, which we will pursue as efficiently and deliberately as possible.”
The Chrysler Chapter 11 case was filed on April 30 in the U.S. Bankruptcy Court, Southern District of New York. The case number is 09-50002, with the Honorable Arthur J. Gonzalez presiding.
More
information about Chrysler's restructuring is available at Client Home.
###
 
#5 ·
Chrysler LLC Statement on Plant Closings

Chrysler LLC Statement on Plant Closings

Auburn Hills, Mich., May 6, 2009 -

We understand that there has been some confusion over the past few days regarding the status of certain Chrysler facilities in connection with its restructuring plan, as was disclosed as part of the company’s Chapter 11 filing last week. We recognize that in the context of consummating the Chrysler-Fiat alliance and last week’s filing, we did not communicate in the fashion we could have with the affected communities. We are committed to working with every Chrysler community throughout this restructuring process.
On Feb. 17, 2009, Chrysler LLC submitted its Viability Plan to the U.S. Treasury and the President’s Auto Task Force. As part of this plan, a number of restructuring actions were designed to address significant declines in the Seasonally Adjusted Annual Rate (SAAR) of auto sales – from 15.6 million in January 2008 to 9.8 million in January 2009 – and position Chrysler for future success.
Chrysler’s stand-alone plan contemplated several plant closings based on continued volume deterioration trends as well as a plan that contemplated a global alliance with Fiat that enhanced its stand-alone plan, and included significant concessions from all stakeholders. The specific plant actions were not made public because it would have been presumptuous to assume that the plan was going to be approved, and inappropriate to communicate prior to thorough discussion with the United Auto Workers union.
On March 30, 2009, the U.S. Treasury and the President’s Auto Task Force rejected Chrysler’s stand-alone Viability Plan. However, the Task Force agreed that Chrysler could submit a plan that would be evaluated with a decision made by April 30, provided that it include a global alliance with Fiat and more aggressive sacrifices by all stakeholders.
Between March 30 and April 29, 2009, Chrysler diligently pursued this path. Fortunately Chrysler was able to secure an alliance with Fiat. The capacity reductions in the new alliance framework mirrored the Feb. 17 plan, though some of the timing was changed due to continued shift in volume trends and consumer demand.
As a result, on April 30, Chrysler LLC announced that it reached a definitive agreement to establish a global strategic alliance with Fiat to form a vibrant new company. This alliance will save Chrysler, more than 50,000 jobs worldwide, including the preservation of more than 30,000 U.S. and 9,000 Canadian jobs, along with thousands of employees at dealers and suppliers. This far outweighs the alternative of liquidation.
In order to effectuate this plan, Chrysler filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code. Chrysler also filed a motion under Section 363 of the Bankruptcy Code, requesting the swift approval by the court of the agreement with Fiat and the sale of Chrysler’s principal assets to the new company. The substantial majority of Chrysler’s assets, operations, plants and people will be transferred to the new company, while assets and liabilities that are not consistent with Chrysler’s business plan will remain with the old company for disposition. Under the supervision of the court, and with the support of the U.S. Treasury and the President’s Auto Task Force, the new company will quickly emerge from bankruptcy as a restructured and financially healthy organization.
The plants currently scheduled for closing are as follows:
Sterling Heights Assembly Plant: A severe decline in the market has resulted in reduction of volumes and thus made operation of this plant not possible. The plant is expected to continue operation through December 2010.
Kenosha Engine: Unprecedented reduction in volume and demand for products has resulted in the decision to idle the plant in December 2010.
Detroit Axle: All required work will be moved to a new facility that is being developed in nearby Marysville, Mich. The plant will be idled in December 2010.
Twinsburg Stamping: Due to deteriorating volumes and in order to optimize capacity, existing volume will be transferred to Warren Stamping and Sterling Stamping plants effective March 2010.
Conner Avenue Assembly Plant: The facility and vehicle platform has been for sale since 2008. The site is scheduled to idle December 2009.
St. Louis North Assembly Plant: Due to volume reduction in the truck segment, capacity will be optimized by moving RamBox production to Warren Truck Assembly Plant effective third quarter of 2009.
Newark Assembly Plant (closed December 2008)
St. Louis South Assembly Plant (closed October 2008)
While most manufacturing operations have been temporarily idled in order to reduce dealer inventory and as part of the restructuring process, this idling was not the result of the bankruptcy filing, and we expect that most workers will be back on the job following the bankruptcy proceedings and the formation of the new company.
It is expected that virtually all employees associated with these facilities will be offered employment with the new company. The Jefferson North Assembly Plant is scheduled to add a second shift which represents 1,200 jobs coinciding with the introduction of the all-new Jeep Grand Cherokee. While the company continues to address difficult market conditions, this alliance will ultimately provide Chrysler customers and dealers with a broader and more competitive lineup of fuel-efficient vehicles and technology.
 
#6 ·
Chrysler lenders agree to deal

Chrysler lenders agree to deal with Treasury plan

Posted Thursday, May 7, 2009, 11:37 am in Employee News

The vast majority of Chrysler LLC’s secured lenders—including a Michigan public retirees’ pension fund, the University of Kentucky and the Bill and Melinda Gates Foundation—agreed to a deal with the Treasury Department to help Chrysler survive, The Detroit News reported.

The holdout creditors own $295 million of the automaker’s $6.9 billion in distressed debt—much less than previously disclosed, bolstering Chrysler’s case for a speedy exit from bankruptcy, the paper said. The committee representing the objecting creditors disclosed their identities Wednesday, as required, in U.S. Bankruptcy Court, the paper reported. They include Stairway Capital Management, Oppenheimer Senior Floating Rate Fund and Foxhill Opportunity Master Fund, the News said.

According to the News, the law firm for the creditors, White & Case, said other lenders “have elected for various reasons to withdraw” from the group of objectors “as a consequence of concerns stemming from publicity of these Chapter 11 cases.” The disclosure that the objecting creditors hold slightly more than 4 percent of the debt may make it easier for Chrysler to quickly complete a sale of its good assets, allowing it to exit bankruptcy in 60 days, the story said. (The Detroit News)
 
#7 ·
Nardelli talks about withdrawal of lender opposition

Nardelli talks about withdrawal of lender opposition

Posted Friday, May 8, 2009, 3:02 pm in Employee News

Last modified on Friday, May 8, 2009, 3:08 pm.

Dear Employees,

The Chrysler renewal story continues to move forward. We are pleased with the decision by the minority secured lenders to withdraw their opposition to Chrysler’s proposed sale to Fiat. We believe this is in the best interests of all of Chrysler’s stakeholders.

All of our constituents can be confident that our business will continue to operate while we move through the restructuring process. As in the past, we have made adjustments to our costs to align with the market, which remains at extremely low levels.

As Nancy Rae notified all salaried employees earlier today, conditions of our DIP financing also include a mandatory two-week unpaid leave for our salaried work force to achieve a cost reduction equivalent to two weeks of salary. While this two-week leave may need to be implemented, we are assessing our progress toward the budget savings that were described in our court filings and hope to achieve sufficient savings to delay any unpaid leave or to render it unnecessary. As we put increasing demands on many employees to help launch a new Chrysler, it also may make it difficult to implement unpaid leave for many employees.

As we go through this transitional period, it’s important that we let consumers know that we’re building a company that will deliver the kind of vehicles they’re looking for – cars and trucks with great design, improved fuel economy, future electric drive options and soon-to-come, world-class technology from Fiat. So this coming Monday, we will launch a new corporate advertising campaign on prime-time network television that highlights our current and future vehicles, and our rebirth as a global automotive company. The campaign uses the theme line that we introduced in print advertisements on May 3: “We’re building a new car company. Come see what we’re building for you.” The advertising tells consumers why they can have trust and confidence in the future of our company.

Despite the difficulties of the past several months, we can look forward to the future with a renewed sense of optimism. If we stick together and stay steadfast on the course we’ve set, I am confident we will reach our goal of creating a sustainable, vibrant and globally competitive company.

Bob
 
#8 ·
May 8, 2009 -Court Approves

Bankruptcy Court Approves Process for Transaction with Fiat and Creation of a NewChrysler

• Court Sets Process for Submission of Alternative Offers

Auburn Hills, Mich. , May 8, 2009 -

Chrysler LLC announced today that the U.S. Bankruptcy Court has entered an order approving a process for the sale of substantially all of the company's assets.

Chrysler argued in its motions that it is imperative that the process be completed expeditiously in order to secure the maximum value for Chrysler’s stakeholders through the Chapter 11 process. Given the stress on
all aspects of the automotive industry and the current idling of Chrysler’s manufacturing facilities, Chrysler said that key relationships with suppliers, dealers, and other business partners cannot be preserved if the
sale process is not concluded quickly. In addition, Chrysler noted that substantial new financial commitments from the U.S. and Canadian
governments require the consummation of a transaction with Fiat within 60 days and make DIP financing available for only that period. The recently announced agreements with the UAW and CAW providing for
modifications to the collective bargaining agreement for active employees and for a new schedule of contributions to a VEBA that will provide retiree medical benefits is also conditioned on the expeditious consummation of the Fiat transaction.

While Chrysler has already conducted discussions with Nissan, GM, Volkswagen, Tata motors, Magna, GAZ, Hyundai, Honda and Toyota and others over an extended period of time, these discussions have not
produced any viable alternative to the proposed alliance with Fiat.
Nevertheless, Chrysler provided in its filings for an orderly and fair process, approved by the Court, that will confirm that the Fiat transaction represents the best and highest bid for Chrysler’s assets, or promptly identify any other higher and better alternatives. To be successful, an alternative bidder would have to surpass the value of the terms of the agreement with Fiat.
As part of this process, a Sale Notice will be circulated widely, and notice will also be published in major newspapers to provide opportunity for any interested party to emerge. The Court has set May 20 as the deadline for the submission of bids; May 26 as the deadline for the notice of designation of lead bidder; and May 27, 2009 as the date for the Sale Hearing to consider the approval of the proposed sale.

The Chrysler Chapter 11 case was filed on April 30, 2009, in the U.S. Bankruptcy Court, Southern District of New York. The case number is 09-50002, with the Honorable Arthur J. Gonzalez presiding. More
information about Chrysler's restructuring is available at Client Home.
 
#9 ·
Court approves process

Court approves process for creation of a new Chrysler

Posted Wednesday, May 13, 2009, 2:34 pm in Employee News

Chrysler LLC announced May 8 that the U.S. Bankruptcy Court has entered an order approving a process for the sale of substantially all of the company’s assets.

Chrysler argued in its motions that it is imperative that the process be completed expeditiously in order to secure the maximum value for Chrysler’s stakeholders through the Chapter 11 process. Given the stress on all aspects of the automotive industry and the current idling of Chrysler’s manufacturing facilities, Chrysler said that key relationships with suppliers, dealers, and other business partners cannot be preserved if the sale process is not concluded quickly.

In addition, Chrysler noted that substantial new financial commitments from the U.S. and Canadian governments require the consummation of a transaction with Fiat within 60 days and they make DIP financing available for only that period. The recently announced agreements with the UAW and CAW provide for modifications to the collective bargaining agreement for active employees, and for a new schedule of contributions to a VEBA that will provide retiree medical benefits also is conditioned on the expeditious consummation of the Fiat transaction.

While Chrysler already has conducted discussions with Nissan, GM, Volkswagen, Tata Motors, Magna, GAZ, Hyundai, Honda and Toyota and others over an extended period of time, these discussions have not produced any viable alternative to the proposed alliance with Fiat.

Nevertheless, Chrysler provided in its filings for an orderly and fair process, approved by the court, that will confirm that the Fiat transaction represents the best and highest bid for Chrysler’s assets or to promptly identify any other higher and better alternatives. To be successful, an alternative bidder would have to surpass the value of the terms of the agreement with Fiat.

As part of this process, a “sale notice” will be circulated widely and be published in major newspapers to provide the opportunity for any interested party to emerge. The court has set May 20 as the deadline for the submission of bids; May 26 as the deadline for the notice of designation of lead bidder; and May 27 as the date for the sale hearing to consider the approval of the proposed sale.

The Chrysler Chapter 11 case was filed on April 30 in the U.S. Bankruptcy Court, Southern District of New York. The case number is 09-50002 with Judge Arthur J. Gonzalez presiding.

More information about Chrysler’s restructuring is available at Client Home.
 
#10 ·
Chrysler LLC Files Papers to Retain Majority of U.S. Dealer Network

Chrysler LLC Files Papers to Retain Majority of U.S. Dealer Network as Part of Company’s Sales Process

Auburn Hills, Mich. , May 14, 2009

- Chrysler LLC today filed a motion with the U.S. Bankruptcy Court seeking to reject certain U.S. dealer agreements, and a list of U.S. dealer agreements to be assigned to the buyer of its business assets. Subject to Court approval, 2,392 Chrysler, Jeep® or Dodge dealers will continue with the new company in a global alliance with Fiat once the sale is complete. This action will help improve the landscape of the Chrysler dealership network following the sale and enhance the full line portfolio of Dodge, Jeep and Chrysler products for customers.

“We are in the process of revitalizing Chrysler's business to succeed as a viable enterprise under new ownership in the future,” said Jim Press, Vice Chairman and President. “The unprecedented decline in the industry has had a significant impact on our sales and forced us to reduce production levels to better match the needs of the market. With the downsizing of operations after the sale and reduction of plants and production, similar reductions must be made to the size of the dealer body. We appreciate the support of our dealers and regret this painful action. We wish market conditions made it possible to keep everyone.”

Chrysler plans to maintain "business as usual" with all of its dealers through the transition. The Company intends to honor warranty and incentive payments during the period that rejected dealers remain active. Chrysler is committed to working with these dealers to ensure a positive relationship with customers. To ease the burden on dealers whose agreements have not been assumed, Chrysler will work to assist in the redistribution of new vehicles and parts to the remaining dealer network.

"It is with a deep sense of sadness that we must take steps to end some of our Sales and Service Dealer Agreements,” said Steven Landry, Executive Vice President, North American Sales and Marketing, Global Service and Parts. “The decision, though difficult, was based on a data-driven matrix that assessed a number of key metrics. In total, 789 dealers, which represents 14 percent of our sales volume, will be rejected and, subject to the court approval, they will discontinue selling Dodge, Chrysler or Jeep vehicles on or about June 9.

"The review was an objective and rigorous process that was both thoughtful and thorough. We plan to work to have an orderly transition. These are extraordinary times, and they call for an extraordinary response. It is important to our dealers and to our customers that these steps be completed quickly and seamlessly as we transition to a new Chrysler,” Landry added.

Additionally, on May 12, the Court approved the motion regarding Chrysler LLC's agreement with GMAC Financial Services to provide the automotive financing products and services to the Company’s dealers and customers moving forward. GMAC Financial Services will be the preferred lender in North America for Chrysler, Jeep and Dodge dealer and consumer business, including wholesale of new and used vehicles as well as retail. GMAC Financial Services will be able to offer the best long-term finance options for Chrysler dealerships and customers and is established as a bank holding company with access to a variety of funding sources.

While difficult, the actions to restructure its dealer network are a necessary part of Chrysler’s viability plan and are central to the proposed sale transaction. These actions will help ensure that both remaining dealers and the new company will be stronger and more profitable going forward.

“A stronger dealer network supported by GMAC’s long-term finance options provides an advantage to consumers, and that is what will ultimately drive the creation of a significantly stronger global competitor,” said Press.

Additional information, including the motions filed, can be found at Client Home.
 
#11 ·
Suppliers are being moved to new company

Nardelli: Suppliers are being moved to new company

Posted Friday, May 15, 2009, 7:35 am in Employee News

Last modified on Friday, May 15, 2009, 9:08 am.

Dear Employees,

Our transition to a vibrant new car company continues. Today, we also began the process of paying suppliers for invoices that predate Chrysler LLC’s filing for Chapter 11 bankruptcy protection on April 30. At the same time, we initiated a procedure to move supplier contracts over to the new company established in a global alliance with Fiat once a sale is complete. We will mail to 1,200 of our suppliers the details on how they can receive payment for pre-petition claims and how their contracts can be assumed and assigned to the new company.

As you know, there is a high degree of interdependence between the automakers and supplier partners in this industry. That is why it is critical to get all of our key suppliers on board to take on new agreements and move business quickly to the new company. This will allow us to swiftly move forward and resume our business of building and selling vehicles.

Supplier acceptance of the “assumption and assignment agreements” will allow them to continue to work with the new company under the terms outlined, while enabling us to restart operations. The process is a fast and efficient way to ensure payment of pre-petition claims and to continue their business relationship with the new company.

We recognize that our Chapter 11 restructuring has caused anxiety for suppliers that have been affected by the industry downturn and economic recession just as we have. Today’s news should be a relief for suppliers.

An initial list of suppliers being invited to go forward with the new company is included in court documents filed today in U.S. Bankruptcy Court. This list is not final, and Chrysler will continue to work with those suppliers that wish to become part of the new enterprise.

In rebuilding our company to prepare for the alliance with Fiat, we are committed to ensure our suppliers are successful and are able to help us create quality, high-value vehicles for our customers. This strong supplier network will be a cornerstone in our drive to build an automobile company that will be successful in the long term.

Finally, let me set the record straight on a news story you may have seen during the last few days. Several news reports have stated that Chrysler executives “found a loophole” for executive compensation. I want to assure you that these reports are absolutely, positively incorrect. Chrysler understands the limitations on compensation for senior executives during the term of the government loans. Chrysler has and will continue to fully comply with all conditions and legal requirements as it relates to executive compensation matters.

Bob
 
#12 ·
New Chrysler: 1,200 Suppliers

May 16, 2009

Chrysler to go on with about 1,200 suppliers

Court date set to hear their objections



Chrysler LLC plans to keep doing business with about 1,200 automotive parts suppliers -- the vast majority of its supply base, the automaker says -- as it transitions out of Chapter 11 bankruptcy protection.

Late Thursday, Chrysler released the list of suppliers with whom it wants to maintain contracts for parts shipped to its U.S. factories. Many of the companies on the list are based in Michigan and other Midwestern states.

To continue a contract in Chapter 11, Chrysler will have to pay those bills in full, said Bob Gordon, who leads the corporate restructuring and bankruptcy practice at Detroit-based Clark Hill PLC in Detroit. But there could be objections from suppliers who say they are owed more than what Chrysler has listed.

A June 4 court date has been set to hear objections from suppliers.

"Our supplier partners will be critical to the success of the new Chrysler that emerges from Chapter 11," said Scott Garberding, Chrysler's purchasing chief, in a statement.

The Obama administration said in a statement that Chrysler's move to continue business with most of its suppliers "provides an important measure of certainty and stability to America's auto supply base."

Suppliers on this list that don't object to what they're to be paid should receive 40% of what they're owed over four weeks. They will receive the rest when Chrysler's assets are transferred to Fiat SpA, according to a person familiar with the supplier plan.

Chrysler called the list disclosed Thursday an initial one, saying it would continue to notify more suppliers of the contracts it plans to maintain and reject.

After moving to pay suppliers, Chrysler has asked its partsmakers to stop applying for the government's program, which backs payments owed by Chrysler. The government offered the support at a cost to both the automaker and the supplier.
Article:Chrysler to go on with about 1,200 suppliers | Freep.com | Detroit Free Press
 
#13 ·
Pensions Are Underfunded

Chrysler’s Pensions Are Underfunded by $10 Billion


May 19 -- Bankrupt Chrysler LLC’s pension plans may be underfunded by more than $10 billion, the federal Pension Benefit Guaranty Corp. has estimated.

If the pensions are terminated, the agency’s claim for the shortfall in the automaker’s bankruptcy case “would exceed $9 billion,” Chrysler lawyers said in a filing today in U.S. Bankruptcy Court in New York.

Chrysler is seeking approval of a settlement among the company, the PBGC, Cerberus Capital Management LP and Daimler AG to partly fund the plans and avoid such a termination. Chrysler’s proposed sale would extinguish Daimler’s $1 billion guaranty securing the pensions, according to the filing.

Under the proposed settlement, Daimler will make $600 million in planned cash contributions to the pensions while reducing its $1 billion pension guaranty to $200 million, leaving it in place even after the sale is completed. Daimler will also forgive a $1.5 billion loan to Chrysler while Cerberus will forgive a $500 million loan, according to court papers.

In exchange for the payments, Chrysler, Cerberus and Daimler will waive all claims against each other related to Cerberus’s acquisition of most of Chrysler in 2007.

“PBGC will work with Chrysler, its unions and all other stakeholders to ensure continuation of the pension plans,” Gary Pastorius, a spokesman for the government pension agency, said in an e-mail. “If possible, we want to avoid plan termination and putting the participants or the pension insurance program at risk.”

A hearing on the settlement is scheduled for May 27.

Loan Write-Off

Daimler said before the Chrysler’s bankruptcy filing in April that it would cede its remaining 19.9 percent stake in the automaker to majority owner Cerberus and write off the $1.5 billion loan to help the company avoid bankruptcy.

Chrysler won approval to auction most of its assets with a group consisting of Italy’s Fiat SpA, a United Auto Workers union benefit trust and the U.S. and Canadian governments as the lead bidder. Chrysler’s 22 U.S. factories, with about 26,800 hourly workers, were idled on May 1.

At the time of its bankruptcy filing, Chrysler was paying health care and other benefits costs for more than 105,000 retirees. The company has 10 different defined benefit pension plans.

Having the proposed retirement system contributions from Daimler “will eliminate the threat of the PBGC terminating the Chrysler pension plans prior to the consummation of the sale,” according to Chrysler.

The case is In re Chrysler LLC, 09-50002, U.S. Bankruptcy Court, Southern District of New York (Manhattan)

LINK:Chrysler?s Pensions Are Underfunded by $10 Billion (Update3) - Bloomberg.com
 
#14 ·
Belvidere Assembly Plant

Chrysler LLC Statement on Belvidere Assembly Plant and Belvidere Satellite Stamping Plant

Auburn Hills, Mich. , May 19, 2009 - Chrysler LLC announces today that the Belvidere Assembly Plant and Belvidere Satellite Stamping Plant (Belvidere, Ill.) will move from a shift-smoothing schedule to a traditional one-shift operation. The shift-smoothing process enabled employees from the first and second shifts to share work as a one-shift operation while working a one-week work/one-week layoff practice.

While the facility moves to a traditional one-shift operation, volume production remains the same.

Approximately 992 employees will be placed on indefinite layoff which will take effect July 27, 2009. Chrysler will work closely with the United Auto Workers union to manage these changes in a socially responsible manner. All employees at these facilities are also eligible for a special buyout program which was extended to Tuesday, May 26, 2009. All separations and retirements may occur at the Company’s discretion on or before May 27, 2009. Currently, the plant is temporarily idled.

The Company will continue to monitor economic indicators as it develops its future operating schedule.

Belvidere Assembly Plant was constructed in 1965 and began production of the Dodge Caliber in December 2005 followed by the Jeep Compass in May 2006 and Jeep Patriot in December 2006. The plants currently employ approximately 2,600 hourly workers.
 
#15 ·
Senators Score Help for Chrysler Dealers

Senators Score Help for Chrysler Dealers

Posted By Trish Turner On May 21, 2009 @ 7:43 pm In Congress

A senior Republican senator, working in tandem with a Motor City Democrat, secured assurances on Thursday that the 789 Chrysler dealers, set to close by June 9, per a Chrysler bankruptcy mandate, will have help recouping the costs of the inventory and equipment left on their lots.Sen. Kay Bailey Hutchison, R-TX, working with Sen. Debbie Stabenow, D-MI, brokered a deal to help the roughly 40,000 people who will be affected by the closure mandate.

In a letter from Chrysler President James Press, Hutchison was assured that all of the dealers will “receive a fair and equitable value for virtually all of their outstanding vehicle and parts inventory.” Press said there are “more than 200 representatives in the field to make sure that we make good on this commitment.” You can read the letter here:

http://hutchison.senate.gov/resources/05_21_09_ChryslerLetter.pdf

Because of the senators’ dogged pursuit of these assurances, which at one point included a threat to hold up a popular war spending bill, dealers will now “receive a daily report which specifically outlines each unit of inventory as its placed in the transition process.” Hutchison said she and Stabenow called Press when they received the letter and got him to assure them that even after June 9, the company would continue to help the shuttered dealerships.

“There is now a plan and a commitment in terms of working through this process,” said Stabenow on the Senate floor, adding a personal note. “I feel very close to this,” the senator said, as both her father and grandfather were car dealers. “I grew up on a car lot,” she said, remembering washing cars as a young child.

Neither senator expressed total satisfaction with the deal, but said it was the best Chrysler could do. Hutchison warned that she would follow up in two weeks to ensure that promises had been kept.

General Motors has given their dealers until the end of 2010 to close, and Hutchison, who is running for governor, said this was not not fair.

Chrysler had previously told its dealers that they would not buy back their vehicles, diagnostic equipment, etc.

Hutchison has 50 Chrysler dealerships in her state, second only to Pennsylvania.

Hutchison, the top Republican on the Commerce Committee, with Stabenow, behind the scenes with Senate leaders, the White House, and Chrysler executives to find a compromise. Hutchison originally crafted an amendment to the war spending bill that would have extended the closure deadline by three weeks.

LINK: Senators Score Help for Chrysler Dealers The Speakers Lobby FOXNews.com
 
#16 ·
Chrysler Says It Has Begun Paying

Chrysler Says It Has Begun Paying Some Suppliers 50% of Bills


May 23 -- Chrysler LLC, seeking to form an alliance with Fiat SpA, has begun paying certain critical suppliers half of what they were owed before the automaker filed for bankruptcy protection.

The cash is coming from debtor-in-possession financing and has been approved by the court, Chief Executive Officer Robert Nardelli wrote in a letter obtained by Bloomberg. The bills are known as “cure payments,” and also signify Chrysler intends to keep doing business with the suppliers, the automaker said in a May 18 statement.

The automaker said May 15 that while under court protection it aimed to pay 40 percent of what was owed to 1,200 suppliers chosen to supply the new Chrysler Group LLC being created from bankruptcy. Partsmakers who disagree with the terms of the contract must file a complaint within 10 days of receiving the notice or take the dispute to bankruptcy court June 4.

“We are asking our suppliers to get on board so that we can resume production more quickly after we complete our restructuring,” Nardelli wrote in the undated letter to employees.

The company had originally said it would pay the remainder sometime after the new company emerged. Nardelli’s letter didn’t specify when the remainder of the money would be sent.

Suppliers owed money from before the filing include Magna International Inc., $63 million, and TRW Automotive Holdings Corp., $27 million.

Suppliers Strained

“Most suppliers are on the brink of bankruptcy themselves, so waiting for 50 percent is a big hit to any supplier, and it’s going to put them in further financial difficulty,” said Dennis Virag, president of the Automotive Consulting Group Inc. in Ann Arbor, Michigan.

More than 40 major suppliers filed for Chapter 11 last year, according to the Motor & Equipment Manufacturers Association. At least five have filed for bankruptcy this year, and many of the country’s largest suppliers, such as Lear Corp. and Visteon Corp., have amended or gotten waivers on loan terms to stay in compliance.

Chrysler sought bankruptcy protection April 30 in New York and plans to sell most of its assets to a new entity formed with Italian automaker Fiat within 60 days of the filing. Some of Chrysler’s unsold assets and liabilities will remain in court.

Nardelli’s letter was verified by a Chrysler official who asked not to be identified because the letter was private.

LINK:Chrysler Says It Has Begun Paying Some Suppliers 50% of Bills - Bloomberg.com
 
#17 ·
Employee Letter 05/22/09

Nardelli updates employees on supplier restructuring

Posted Friday, May 22, 2009, 4:47 pm

Dear Employees,

Before those of us in the United States break for the Memorial Day holiday weekend, I’d like to bring you up to date on some recent developments with our suppliers.


As we move with speed through our restructuring, it’s critical that our suppliers be ready to go once the new company (Chrysler Group LLC) completes its purchase of assets from Chrysler LLC with bankruptcy court approval. We have adequate debtor-in-possession (DIP) financing and a court-authorized process in place to transfer the vast majority of our supplier base to Chrysler Group LLC. Last week, we mailed contract assumption agreements to 1,200 suppliers, and this week some of them began returning signed agreements, paving the way for the resumption of production and the normalization of operations.

Despite some media reports to the contrary, we have begun transferring “cure” payments for pre-petition receivables to essential suppliers that have signed and returned their contract assumption letters. Using our DIP financing, we are promptly providing our essential suppliers initial payments of 50 percent of the amounts owing at the time of filing upon receiving their signed agreements. We are asking our suppliers to sign these agreements and get on board so that we can resume production more quickly after we complete our restructuring and finalize our strategic global alliance with Fiat.

As our U.S. employees head into a long weekend, I hope you are able to enjoy some relaxing time with family and friends. At the same time, please keep in mind the solemn meaning of Memorial Day – a day set aside to honor the memories of the brave men and women who have died in service to our great country. We also are grateful to all veterans and to those who wear the uniform today for protecting us and enabling us to live the American way of life.

As you know, Chrysler has a long tradition of support for the U.S. military – producing armaments, supplying vehicles and backing many initiatives that support those serving in the Armed Forces. Despite the tough times in our industry, Chrysler continues its commitment to “Honoring Those Who Serve” for the sacrifices they are making. Chrysler is proud to provide employees military friendly benefits and policies. We maintain employees’ full wages and benefits while these courageous men and women are on active duty and provide the same status, pay and benefits upon their return to Chrysler. Through our partnerships with organizations such as Freedom Calls and Operation Gratitude, Chrysler continues to help bring some of the comforts of home to our men and women serving in Iraq and Afghanistan.

In September, I was proud to represent Chrysler LLC in accepting the 2008 Secretary of Defense Freedom Award – the highest recognition given by the U.S. government to companies for outstanding support of their employees who serve in the National Guard and Reserve. Two months ago, our company also was awarded the Indiana Patriot Award from the Employer Support of the Guard and Reserve (ESGR) for our continued support of those organizations. Maj. Jose Soto Perez, a maintenance area supervisor at Chrysler’s Kokomo (Ind.) Csting Plant who is on active duty in Iraq, submitted Chrysler as a candidate for the honor.

Closer to home, after the terrorist attack on Sept. 11, employees at the St. Louis South Assembly Plant built and painted a minivan in a stars and stripes theme to pay tribute to those who lost their lives. Since then, the minivan has been displayed in front of the plant. This morning, at the request of UAW Local 110 Veterans Committee, the plant donated the minivan to VFW Post 2593 in Arnold, Mo.

As we enjoy the U.S. holiday, let’s all remember that we are truly blessed and share in the hope that all of our employees – and all Americans – who are in harm’s way will come home safely.

Bob
 
#18 ·
Response to Indiana State Treasurer

Chrysler LLC Statement in Response to Indiana State Treasurer Protesting Chrysler LLC's Chapter 11 Proceeding and Sale

Auburn Hills, Mich., May 25, 2009 - Indiana State Treasurer Richard Mourdock is protesting Chrysler LLC's Chapter 11 proceeding and sale on behalf of three state pension funds that he oversees.

Chrysler strongly believes Indiana Treasurer Mourdock’s position is wrong. Satisfying the Indiana Treasurer’s demands would lead to the liquidation of Chrysler, resulting in the loss of more than 4,000 Chrysler jobs and 9,000 retiree pensions in Indiana alone.


The combined Chrysler-related investments in the three state pension funds in question totalled approximately $17 million. The cumulative loss on these investments under the proposed transaction would be approximately $2 million. Chrysler’s liquidation analysis shows first lien lenders would get between zero and 18 cents on the dollar in liquidation, versus 29 cents in the proposed transaction. However, Chrysler believes this range is unlikely and that there is low probability of a high-side outcome. The company believes it is more likely to be on the very low end, as for the entire time that Chrysler has been in Chapter 11, it has had very few bids for its assets. Thus, under a liquidation scenario, the loss to Chrysler’s employees, suppliers and dealers would be far more: in the tens of billions of dollars.

Treasurer Mourdock has expressed that he takes his "oath of office and fiduciary responsibilities very, very seriously.” Chrysler believes Treasurer Mourdock is risking significantly further loss, and would be living up to his fiduciary responsibilities by accepting the terms that 98 percent of other creditors accepted. The Treasurer's actions lead one to wonder if his motives are financial or political.

Chrysler is committed to supporting its operations in Indiana, where more than $150 million are paid annually to Chrysler employees, $20 million in state taxes are paid by Chrysler employees, $3 billion of materials are purchased from more than 200 Indiana-based suppliers, and approximately 3,750 people are employed at 75 Chrysler dealerships. Additionally, Chrysler has donated more than $6.5 million to non-profit and community organizations in Indiana statewide in the past 10 years.

Important facts to note:

-The three funds Treasurer Mourdock oversees are:

- Indiana State Teachers Retirement Fund – This is a reported $7.8 billion fund. The Chrysler debt is less than 1 percent of the fund ($32.2 million or .466 percent of Chrysler first lien debt)

- Indiana State Police Pension Trust – This is a reported $250 million fund. The Chrysler debt is less than 1 percent of the fund. ($1.3 million or .019 percent of Chrysler first lien debt)

- Indiana Major Move Construction – This is a reported $2.5 billion fund. The Chrysler debt is less than 1 percent of the fund ($8.8 million or .128 percent of Chrysler first lien debt)

-The combined Chrysler debt to the three funds is $42.3 million (.6 percent of Chrysler’s first lien debt)

-While the three funds have a face value of $42.3 million, the purchase price was approximately $17 million. We expect they will receive $15 million, for a total investment loss of $2 million.

-Under Chapter 11, Chrysler’s first lien creditors were allocated $2 billion (instead of the $7 billion in original debt). Ninety-eight percent of the first lien creditors have agreed to this allocation.

-The Indiana Treasurer is willing to put Chrysler in liquidation over less than 1 percent of the three funds assets.
 
#19 ·
Fiat: "already concerned"

Fiat already concerned for 'deteriorating' Chrysler

Fri May 22, 2009 11:08pm BST

* Fiat says concerned about Chrysler's deterioration
* Chrysler, creditors, Fiat file objections to Ind. pensioners
* Adviser: Liquidation would yield less than once thought



NEW YORK, May 22 Italian carmaker Fiat SpA
said in court papers on Friday that it is "already
concerned" about the "deteriorating value" of Chrysler's assets
and that a U.S. district court should not obstruct its sale
process.


Chrysler, its creditors' committee, and Fiat filed a series
of court documents on Friday, asking the U.S. District Court in
Manhattan to reject a request by a group of Indiana state
pension funds that the district court intervene in the
bankruptcy case and postpone the sale of Chrysler's assets.

"Any material delay in the implementation of the bidding and
sales process that the Bankruptcy Court has carefully but
expeditiously set in motion will destroy Chrysler, put hundreds
of thousands of people out of work, and devastate communities in
both the United States and Canada," Chrysler said in court
documents.

Chrysler has a government deadline of June 15 to close the
transaction to sell itself to a "New Chrysler" owned by the U.S.
and Canadian governments, Chrysler's union and Fiat, according
to court papers. Chrysler's unsecured creditors' committee said
in court papers on Friday that if the sale was not able to go
forward it would mean certain liquidation for the iconic U.S.
automaker.

DETERIORATING VALUE

Fiat, however, said that any delay to the sale process "could
ultimately prove fatal" to Fiat's plan to revive Chrysler. It
said it already has concerns about the value of the assets "New
Chrysler" is expected to acquire from "Old Chrysler" as the
company's plant shutdown is affecting its suppliers and dealer
networks.

Chrysler's financial advisory firm said in separate
bankruptcy court documents on Thursday that, based on updated
financial information, the financial recovery for lenders and
the U.S. government would be worse under a liquidation scenario
than it previously thought.

In the documents, Capstone Advisory Group said the company's
first lien, or most senior lenders, would have recovered 18
percent of their investment at the most and zero at the worst in
two different liquidation scenarios based on its cash balance as
of April 30.

In a previous analysis released after Chrysler's April 30
bankruptcy filing and based on its April 1 cash balance of $1.34
billion, the lenders would have recovered from 9 to 38 percent
of their investment.

The report prepared by Capstone's Robert Manzo said the car
company had $407 million of free cash to use for a potential
liquidation as of April 30.

Under the new scenario, the U.S. Treasury would recover 3 to
5 percent of its investment, compared with 3 to 6 percent in
Capstone's previous analysis.

Chrysler and Fiat said that if the district court decides to
grant the Indiana pension funds' request, the funds should be
required to put up a substantial bond to compensate parties
harmed by that delay. Chrysler asked that the funds put up a $2
billion bond.

According to court papers, the Indiana pension funds hold
about $43 million of Chrysler's total $6.9 billion in senior
debt. The pension funds have said they object to the way
Chrysler is planning to sell itself and distribute funds to more
junior creditors ahead of them. They say that the government
does not have the authority to take these actions and asked that
the sale be delayed so constitutional questions about the
government's involvement can be explored.

The district court is slated to hear the pension funds'
request on Tuesday. Chrysler is scheduled to have its sale
hearing in bankruptcy court on Wednesday.

The bankruptcy case is In re: Chrysler LLC, U.S. Bankruptcy
Court, Southern District of New York, No. 09-50002. The district
court case is in U.S. District Court, Southern District of New
York, No. 09-04743.

LINK:UPDATE 2-Fiat already concerned for 'deteriorating' Chrysler | Reuters.com
 
#20 ·
Pension funds lose Chrysler fight

Pension funds lose Chrysler fight in district court



NEW YORK, May 26

- A U.S. Federal Judge denied on Tuesday a request by a dissenting lender group to delay bankrupt automaker Chrysler LLC's sale hearing and remove the bankruptcy case to district court.

After a federal court hearing in Manhattan on Tuesday, U.S. District Judge Thomas Griesa said he would deny a motion by a group of Indiana pension funds claiming the government did not have the authority to provide funds to Chrysler for its proposed sale. The funds had asked the judge to prevent Chrysler's scheduled sale hearing in bankruptcy court on Wednesday from going forward, but the Judge also denied that request.

Chrysler is seeking approval this week to sell itself to a a "New Chrysler" owned by the U.S. and Canadian governments, Chrysler's union and Italian carmaker Fiat SpA.

Judge Griesa said he would explain his decision in a formal opinion later on Tuesday. He said objecting parties should have a "fair" opportunity to appeal the bankruptcy judge's ruling on the sale at a later date.

LINK:Business Feed Article | Business | guardian.co.uk
 
#21 ·
Chrysler LLC Statement

Chrysler LLC Statement Regarding U.S. District Court Motion to Withdraw Reference

Auburn Hills, Mich., May 26, 2009 - "We are pleased with the Judge's decision to deny the withdrawal the reference and therefore deny the motion for a stay for the Indiana Pension Funds. We look forward to the hearing on our sale motion in U.S. Bankruptcy Court tomorrow."
 
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