Back from the dead?

May 22, 2009

French and German Military surgeons perform abdominal surgery on an Afghan civilian patient at the French Military Hospital in KabulChrysler’s troubles looked so great even its own executives thought the company was headed for liquidation, however emergency surgery in the bankruptcy courts appears to have saved the patient.

As Caroline Humer and Tom Hals write, the sale of Chrysler’s main business to Italy’s Fiat and other groups looks likely to be sealed by the end of May, taking most of the company out of bankruptcy within just 30 days, hitting the government’s target deadline.

Judge Arthur Gonzalez has been instrumental in driving through the process, quickly rejecting objections from a range of creditors. A few sticking points could still hold up the sale, with a group of Indiana pension funds filing suit in a separate court, but most specialists expect the judge to approve the sale to Fiat at Wednesday’s hearing.

The Fiat deal is an example of what is called a “363 sale” in the bankruptcy world, which is typically done in the first couple of months after a filing. In Chrysler’s case, the sale sped through quickly because Chrysler showed that the 30-day timeline was critical to saving the business. Read an earlier analysis by Caroline here.

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