[Allpar News System]

Delaware Chancery Judge Donald Parsons, who will be the one to set a value on the Chrysler stake held by the UAW's retiree healthcare trust, was expected to deliver a decision by the end of July. According to a Bloomberg report, it now appears he may throw a wrench into the works by requiring a trial that could add as much to a year to the process and put Fiat's plans to acquire the rest of Chrysler on hold. Sergio Marchionne, CEO of both Chrysler and Fiat, had hoped to be able to get a clear decision and move forward by the third quarter of this year, completing a merger of the two automakers in 2014. According to the original timetable, Judge Parsons was expected to make his ruling on the basis of pre-trial motions from both sides. However, Bloomberg cites Charles Elson, director of the John L. Weinberg..

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[Allpar News System]

Delaware Chancery Judge Donald Parsons, who will be the one to set a value on the Chrysler stake held by the UAW's retiree healthcare trust, was expected to deliver a decision by the end of July. According to a Bloomberg report, it now appears he may throw a wrench into the works by requiring a trial that could add as much to a year to the process and put Fiat's plans to acquire the rest of Chrysler on hold. Sergio Marchionne, CEO of both Chrysler and Fiat, had hoped to be able to get a clear decision and move forward by the third quarter of this year, completing a merger of the two automakers in 2014. According to the original timetable, Judge Parsons was expected to make his ruling on the basis of pre-trial motions from both sides. However, Bloomberg cites Charles Elson, director of the John L. Weinberg..

View the original, full post

 

[Erik Latranyi]

Kill all the lawyers...kill them tonight.

 

[HotCarNut]

I hate to say it, but this is probably in the best interest of the retirees and VEBA. Chrysler gets more valuable by the day (screwed up launches not withstanding) and the longer the process goes on, the higher the price the stock will fetch.

 

[Mike V.]

Kill all the lawyers...kill them tonight.

The Purge.

Mike

 

[MoparNorm]

I hate to say it, but this is probably in the best interest of the retirees and VEBA. Chrysler gets more valuable by the day (screwed up launches not withstanding) and the longer the process goes on, the higher the price the stock will fetch.

Or, Chrysler is losing money every day that passes without a decision.
Would not the value be set for the DATE the Fiat offer was tendered and not the date of the decision?

" Elson noted that Parsons is “a very careful judge.”

Or very timid. This is why it's important to pick the suitable location for the combined headquarters. Delaware is a tax haven for corporations, but the wheels of justice turn slow.*


* no inference if that is good or bad, just that it is...

 

[Dave Z]

Chrysler is not losing money, as far as I know, due to the delay. I would suspect what Sergio is getting in terms of financing for the buyout is letters of credit and such, that only cause interest when they are drawn on.

Parsons does not trust the Chrysler numbers, and for good reason. He's already found holes in the logic. He knows that Chrysler is negotiating with the VEBA. This may well be public posturing to avoid the public expense of hiring accountants and diverting a judge's attention for weeks and weeks of full time financial drudgery — if Sergio sees Parsons taking forever, Sergio will make a deal that will probably be close to Parsons’ final decision anyway.

In short, perhaps this is a rare case of a U.S. judge actually making a rational decision that is in the interest of the taxpayers.

I have no problem with the VEBA getting more money, because it is for health care for the people who designed and built the cars we love so much... I would like to see people like the Ramchargers taken care of.

 

[MoparNorm]

Chrysler is not losing money, as far as I know, due to the delay.

Perhaps. However the drawn out decision (wasn't this originally thought to take 30-60 days, about 160 days ago?) causes delays in planning, development, and action, all of which do cause increases in cost and delays in getting product to market, which is deferred sales and lost revenue.

Historically an arbitration judge will split the two parties proposals in the middle, therefore causing Chrysler to submit low and VEBA to submit high, in order for either party to get close to what they really want.
Both sides are in a tough spot, Fiat is hemorrhaging in Europe, VEBA is in danger of being sold short, however, in fairness, we do not know if the deliberation speed of this judge is due to his pace, or a slowness in getting requested information from the parties.

 

[Erik Latranyi]

This is all crap.

There was an agreement created with the formulas to calculate the price.

This is why contracts are worthless today.

 

[Lampredi]

Is a Fiat-Chrysler competitor owed a favour by this judge? Perhaps a certain competitor who'd rather see Fiat having to sell Alfa to finance the Chrysler takeover? (Not that I think it's the case, but the thought has crossed my mind...)

 

[Muther]

Having a wife deep inside the legal system...

She read the article+comments, and she said a private sttlement is in the best interests of both parties, this judge likely see's this, and this is his way of telling them them to settle this amongst themselves, and that there will be even more delays to delay this delay. She added that both parties likely knew what the judges decision would be (or had a really good idea), have contingencies in place, and will likely act when the time is right. A trial would be a worst case scenario for both.

 

[RVC]

After almost a YEAR(!) this judge has finally "decided" that....he'll let someone else decide.

This is such BS.

 

[Dave Z]

Muther...

Exactly what I was saying.

RVC and Erik...

"There was an agreement created with the formulas to calculate the price."

Yes, and the agreement was badly enough written that different people can interpret it and get prices billions of dollars from each other.

The judge looked at that and saw it would cost tens or hundreds of thousands of taxpayer dollars to figure out where reality was. Meanwhile he saw the VEBA and Chrysler negotiating.

In my experience, sane judges always want parties to settle things among themselves without using the legal system.

 

[Stéphane Dumas]

Is a Fiat-Chrysler competitor owed a favour by this judge? Perhaps a certain competitor who'd rather see Fiat having to sell Alfa to finance the Chrysler takeover? (Not that I think it's the case, but the thought has crossed my mind...)

You might be on to something. However "Competitor X" isn't the only one in town and some other competitors eyes this case as well or being the accomplices of "Competitor X". No, the suspects are not Colonel Mustard or Professor Plum.

 

[plymouth1]

Sell all of Fiat and its brands to VW. Fiat, like the DBAG junk will NEVER be MoPars in my opinion. AMC's can slide since WE bought THEM and I own one.

 

[Dave Z]

"Is a Fiat-Chrysler competitor owed a favour by this judge?"

Oh, for Heaven's sake. I am pretty certain the judge is not trying to sabotage Chrysler. I am also pretty certain he's not happy with Sergio's ingenuous analysis nor Chrysler’s obfuscation of the data.

 

[Muther]

"Is a Fiat-Chrysler competitor owed a favour by this judge?"

Oh, for Heaven's sake. I am pretty certain the judge is not trying to sabotage Chrysler. I am also pretty certain he's not happy with Sergio's ingenuous analysis nor Chrysler’s obfuscation of the data.

"Is a Fiat-Chrysler competitor owed a favour by this judge?"

Oh, for Heaven's sake. I am pretty certain the judge is not trying to sabotage Chrysler. I am also pretty certain he's not happy with Sergio's ingenuous analysis nor Chrysler’s obfuscation of the data.

The judge's intention was to have them settle out of court. That, in reality is best for both. It has not happened yet (thus these legal proceedings). Since the two children cannot get along, he is punishing both of them, by making them do something neither of them wants. A very public, very media frenzied, very costly trial. The media would turn this into something on to the scale of the OJ trial.

VEBA would get played by the media as a money grubbing union intent on F-C's destruction. F-C would get played by the media as an evil corporate giant intent on raping the unions. Both would suffer egregiously, and unfairly. No good would come of such a trial.

Sergio is a tough negotiator, the judge and his legal team did their research about this whole mess, and the judge then rendered what is, in reality, an excellent decision. I applaud him. If it does go to trial, which it won't, mark my words, at least the taxpayers won't be funding it.

The loser will.

 

[Erik Latranyi]

Muther...

Exactly what I was saying.

RVC and Erik...

"There was an agreement created with the formulas to calculate the price."

Yes, and the agreement was badly enough written that different people can interpret it and get prices billions of dollars from each other.

The judge looked at that and saw it would cost tens or hundreds of thousands of taxpayer dollars to figure out where reality was. Meanwhile he saw the VEBA and Chrysler negotiating.

In my experience, sane judges always want parties to settle things among themselves without using the legal system.

I have written and signed enough agreements to know that I would never sign one without examples of how formulae are used. Examples of every variable ensured clarity and removes idle speculation.

If there is anything subjective, you name the independent party that will decide that value. Leaving things to a judge is ludicrous.

 

[Lampredi]

Sell all of Fiat and its brands to VW.

WHAAAAT?! :scared: That sentiment is outright evil (and thus certainly in breach of certain forum rules ).

 

[Lampredi]

"Is a Fiat-Chrysler competitor owed a favour by this judge?"

Oh, for Heaven's sake. I am pretty certain the judge is not trying to sabotage Chrysler. I am also pretty certain he's not happy with Sergio's ingenuous analysis nor Chrysler’s obfuscation of the data.

Yes, I realize it's far fetched, and as I said I don't actually believe it. However, Alfa Romeo's existence could indeed be potentially threatened if it turns out Fiat is forced to sell it in order to finance the Chrysler takeover (a situation which conveniently happens to play into the hands of a certain auto executive), as an Alfa Romeo fan I'm having nightmares about it. So I'd rather see the Fiat-Chrysler merger happen as soon as possible, to allow the merged company to publish and implement its future plans (I'm guessing a lot of plans are on hold pending the completion of the merger).