Judge allows sale of Chrysler assets to Fiat

A U.S. bankruptcy judge on Sunday approved the sale of substantially all of Chrysler's assets to Fiat, helping to finalize the two automaker’s alliance as well as the American company’s bankruptcy proceedings. Approval was given for the $2 billion sale of the assets to a new company that will be 68% controlled by a healthcare trust aligned with the United Auto Workers (UAW) union. Fiat will control 20%, while the U.S. and Canadian governments will control the remaining 12%.

In his written opinion Judge Gonzalez said the only alternative to approving the sale was the "immediate liquidation" of the company and that he was concerned about saving the value of Chrysler as a continuing operation, Reuters reports.

Objectors to the deal had included a group of Indiana pension funds holding secured debt, some of the 789 dealerships Chrysler plans to reject, and consumer groups. They had argued that Chrysler was moving too quickly, that the sale violated bankruptcy principals and that the company was needlessly closing hundreds of its dealerships.

In the lead up to Chrysler’s restructuring deadline, the carmaker was forced to shutdown a number of plants and leave thousands of vehicles, engines and components unfinished. This led to the fears that important model launches, like the redesigned Jeep Grand Cherokee and next-generation Chrysler 300, could be delayed.

The sale of Chrysler’s assets to the newly established Chrysler Group is expected to take place almost immediately. Incidentally, the decision was made less than 24 hours before Detroit rival General Motors announced its own bankruptcy, the details of which you can read about by clicking here.