The sale of bankrupt automaker Chrysler LLC to a group including Italian carmaker Fiat SpA and the US government was upheld by a US appeals court on Friday, but the deal is expected to be appealed to the Supreme Court by a group of investors.
A three-judge panel of the US Court of Appeals for the Second Circuit stayed the closing of the sale until tomorrow afternoon or until the Supreme Court decides whether to hear an appeal.
If the sale is allowed to close, a “New Chrysler” will exit bankruptcy tomorrow, reorganizing the automaker in less than 60 days as demanded by the White House.
The decision also reinforces the case of General Motors Corp (GM), which is using a similar quick-sale strategy in its bankruptcy.
The appeals court said it would issue a written order later on Friday. The judges returned their decision 10 minutes after lawyers finished presenting their arguments.
“There’s one more stop on the train,” Tom Lauria, a lawyer for the Indiana pension funds at White & Case, which appealed the sale order, told reporters after the decision.
Earlier this week a bankruptcy court judge approved the sale of most of Chrysler to a group led by Fiat, a union-aligned trust and the governments of the US and Canada. The group agreed to pay US$2 billion to secured lenders, who were owed US$6.9 billion.
Meanwhile, GM has reached a deal to sell its Saturn brand to the Penske Automotive Group in a move saving some 350 dealerships and 13,000 jobs in the US, GM said on Friday.
The deal comes just days after GM filed for bankruptcy protection as it struggles to overcome enormous debt and slumping sales.
It also comes after GM announced the sale of its hulking Hummer brand to Chinese industrial machinery firm Sichuan Tengzhong Heavy Industrial Machinery Co (四川騰中重工機械) last week and has also reached a deal to sell its European brand Opel to a Canadian-Russian consortium.
The Saturn deal would grant Penske, a big auto dealership operator, the rights to the Saturn brand and its distribution network and assets including its inventory.
GM said a memorandum of understanding calls for the automaker to continue to produce Saturn cars on a contract basis, including the Saturn Aura sedan and the Vue and Outlook sport utility vehicles.
That contract would last at least two years and then Penske would begin importing vehicles produced by a foreign automaker, the Detroit News reported.
If completed, GM said, “the deal would save more than 350 dealerships and 13,000 jobs at Saturn and its retailers in the United States, and would preserve the customer-focused Saturn brand.”
It is expected to close in the third quarter of this year. Financial terms were not disclosed.
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