Chrysler asset sale approved

Even as General Motors prepares to file Chapter 11 bankruptcy, Chrysler is a step closer to exiting it as Judge Arthur Gonzalez approved the sale of most of the automaker’s assets to a new company, Chrysler Group LLC, led by Fiat SpA and majority-owned by the United Auto Worker union’s health care trust. Senior secured creditors will receive about 29 cents on the dollar for their holdings.

The ruling came Sunday and clears the way for the alliance between Chrysler and Fiat. In a 47-page opinion, Judge Gonzalez said that liquidation of Chrysler’s assets was the only alternative to the sale and he believed the sale would preserve the value of Chrysler as a going concern.

In his opinion, Gonzalez also wrote, “Indeed, because of the overriding concern of the U.S. and Canadian governments to protect the public interest, the terms of the Fiat Transaction present an opportunity that the marketplace alone could not offer, and that certainly exceeds the liquidation value.”

Gonzalez rejected almost all of the objections that had been raised, even questioning the legal grounds for some of them.

The Fiat-Chrysler deal should now be able to close almost immediately but industry and court watchers expect the disappointed objectors to file appeals.