With each passing day in Chapter 11 protection, Chrysler is losing by way of idle plants, precariously placed apprehensive suppliers and dealers and dwindling consumer confidence in the brand. The go-ahead by the court will not only enable Chrysler to quickly restructure and put its house in order but will also restore confidence in its suppliers and potential customers.
The way forward
As per the orders, interested bidders have to put in their offers before the May 20 deadline. A May 27 hearing has been fixed to approve the sale. Again, it was Chrysler’s request to expedite this sale process to enable it to remain a viable company.
Through the bankruptcy process, Chrysler intends to put its assets on the market. According to the automaker’s approach, the new entity would be jointly owned by Fiat, the United Auto Workers and the U.S. and Canadian governments.
Dissident lenders unhappy
The ruling is a major setback for a group of protesting creditors that had sought to block the company's sale. This group had also received a televised reproof from President Obama for creating a bottleneck in Chrysler’s asset sale plans.
The dissident lender group had requested the court to modify the bidding process to make it more competitive. The lender group averred that Chrysler’s way of going about things was "designed to prevent, not encourage, competitive bidding." They termed the accelerated timetable an "absurdity."
The dissidents also tried, in vain, to persuade Gonzalez to reject Chrysler's request to begin using $4.5 billion in government loans to fund operations.
The group which calls itself the "non-TARP lenders" claims that they have not taken any bailout money from the government. They further allege that their interest is different from the interest of the four large banks that agreed to the Chrysler bankruptcy plan.
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