Following Chrysler�s filing for bankruptcy at the end of April, the company has asked the U.S. Bankruptcy Court to expedite their case in a swift manner in order for them to speed up the planned sale of the company to Italy�s Fiat SpA. Chrysler, which filed on April 30, is seeking a hearing to approve the $2B sale of the majority of the company�s assets that would clear the way for the merger with Fiat.
The company is looking to sell their most valuable assets into a new company owned by Chrysler�s union, Fiat and the U.S. government.
On Tuesday, Chrysler received the court�s approval to access a $4.5B bankruptcy loan from the U.S. and Canadian governments that will now allow the company to move forward with their planned sale.
Upon the merger, Fiat would start with a 20% stake in the company, which would increase to a 35% stake shortly thereafter. If the deal falls through, Chrysler is seeking approval from the judge for a $35M breakup fee from Fiat.
"Absent a prompt sale, approved in the coming weeks, the value of the debtors' assets will rapidly decline and the ability to achieve a going concern sale will be lost," Chrysler representative announced in court documents regarding the pending sale to Fiat.
The automaker has since shut down all of their plants and the more time it takes for the company to set all of their ducks in a row and sell the company to Fiat, the more damaging the outcome could be to the remainder of the surviving company.
Chrysler currently has 30 plants throughout the U.S., Mexico and Canada. However, five of the company�s assembly plants, one stamping plant and an engine and axle facility were specifically excluded from the planned sale.
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