Chrysler is in Court today to ask a bankruptcy judge permission to sell the bulk of its assets to Fiat in hopes to avoid liquidation. Attorneys representing Chrysler have argued that the deal with Fiat is the auto companies only hope to avoid a liquidation sale while dealers, bondholders and others creditors have filed hundreds of objections seeking to stop the sale. Early in the hearing the court denied a motion for a continuance to allow a pair of Indiana state pension funds and a state construction fund more time to prepare for the sale hearing.
In the latest round of negotiations, Chrysler has agreed to place an estimated $48 million in escrow for sales and business taxes owed to the state of Michigan and had clarified that it will pay its 2009 property taxes for its headquarters located in Auburn Hills, MI. Chrysler has also announced that it would honor lemon law claims from existing owners despite the bankruptcy. Chrysler has already promised the court it would honor current warranties. It is still unclear, however, whether the company will abandon its workers’ compensation claims which prompted the Michigan, Illinois and Ohio to file objections to the sale to Fiat. In the latest news, it is being reported that if the deal cannot be closed by June 15th, Fiat could back out leaving liquidation of Chrysler the only option.