Quote:
Chrysler gets court OK on loan, seeks Fiat sale

04 May 2009Even without an extended shutdown, Chrysler expects delays of up to six months in the launch of a redesigned Jeep Grand Cherokee for the 2011 model year. It expects the availability of replacement parts to be restricted within weeks as well.

Chrysler salaried employees are being required to take two weeks of unpaid vacation.

"I think that it is very realistic to sell assets and get that done in a very short period of time, but that won't solve the bankruptcy case entirely," Sheryl Toby, an attorney with Dykema Gossett in Bloomfield Hills, Michigan, told Reuters on the sidelines of an event in New York.

Toby, who has worked on auto industry cases for 20 years, said other issues such as those surrounding dealers and suppliers will be discussed for extended periods.

DISSENTERS THREATENED - LAWYER

The U.S. automaker, which has been operating with $4 billion of emergency U.S. government loans, failed to reach a deal with all of its secured first-lien lenders last week to restructure its debt, forcing Chrysler into the courts.

The decision by some lenders to hold out set off a political firestorm.

President Barack Obama called the holdouts "speculators" who hoped for a better deal from the U.S. taxpayer, and Michigan lawmakers threatened to pull state business from them.

Tom Lauria, an attorney at White & Case who represents an ad-hoc group of the dissenting secured lenders, told the court that publicly identified group members had received death threats "which they perceive as being bona fide."

As a result, the group will seek to disclose its membership to the court under seal on Tuesday, Lauria said. Lenders who received death threats have notified police and the FBI, he said.

The first-lien lenders were owed a collective $6.9 billion, and four large banks led by JPMorgan Chase & Co (JPM.N) that controlled about 70 percent of the debt had approved a plan to take $2 billion cash.

A group of investment funds led by Oppenheimer Funds and Stairway Capital had objected to the payout terms as unfair and filed an immediate objection on Monday asking Gonzalez to block the Fiat deal and the government's offer to provide bankruptcy financing to Chrysler.

JPMorgan lawyer Peter Pantaleo, of Simpson Thacher & Bartlett LLP, told the court Chrysler had 90 percent of the debt agreed, more than enough to support the sale.

The $2 billion payout would amount to about 29 cents on the dollar, but a liquidation analysis prepared by an adviser to Chrysler suggested the payout could be as little as 9 cents on the dollar if the automaker were forced to liquidate.
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Fair play!