Judge Greenlights Chrysler Auction

Bankruptcy ruling starts clock ticking toward merger with Fiat
By Rob Quinn,  Newser Staff
Posted May 6, 2009 2:21 AM CDT
The proposed Chrysler-Fiat deal would create the world's sixth-largest auto maker.   (AP Photos/Michael Probst, file)
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(Newser) – A bankruptcy judge has given Chrysler approval to auction off most of its assets by May 27, the Detroit Free Press reports. The move—decided over the strenuous objections of some lenders holding Chrysler debt—is the first step toward the auto maker's proposed partnership with Fiat, which has offered some $2 billion for Chrysler's assets.

A lawyer for Chrysler lenders argued that the proposed Chrysler-Fiat deal was illegal, as it would pay off the UAW and other creditors before lenders holding secured debt, who normally get paid first. A Chrysler financial adviser countered that lenders would likely get nothing without the Fiat deal. He added that the only other buyer who expressed interest in Chrysler was an unidentified man who called once and never rang back.