WORLD> America
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WORLD> America
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Chrysler heads to court for key bankruptcy hearing
(Agencies)
Updated: 2009-05-27 22:04 NEW YORK -- The future of Chrysler hangs in the balance as it heads to court Wednesday to ask a bankruptcy judge for permission to sell the bulk of its assets to a group headed by Italy's Fiat in hopes of saving itself from liquidation.
However, if the deal doesn't close by June 15, Fiat could back out. Also Wednesday, fellow US-based automaker General Motors Corp. is set to announce the results of a debt swap offer that could decide whether it can restructure out of court or will follow its Auburn Hills, Mich.-based rival into Chapter 11 bankruptcy protection.
Automakers worldwide are struggling as the global recession has reduced demand for new vehicles. But GM and Chrysler have been particularly hobbled by promises to cover the health and pension costs of tens of thousands of unionized retirees -- along with recent record-high gasoline prices that reduced demand for their low-mileage trucks and SUVs. On Tuesday, Chrysler avoided a possible roadblock to its sale when a US district judge ruled that a legal review of its bankruptcy proceedings wasn't needed before the sale hearing could take place. Judge Thomas Griesa denied a withdrawal motion from attorneys representing a pair of Indiana state pension funds and a state construction fund. The funds had argued that a review was needed because of the unprecedented involvement of the Treasury Department in the case and its use of federal bailout funds for bankruptcy financing. Chrysler released a statement late Tuesday saying that it was pleased with Griesa's decision and looked forward to Wednesday's hearing in bankruptcy court. |
