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Chrysler sale to Fiat may close today

Boxes of documents related to Chrysler's month-old bankruptcy case were brought to court yesterday. Boxes of documents related to Chrysler's month-old bankruptcy case were brought to court yesterday. (Seth Wenig/Associated Press)
By Bree Fowler
Associated Press / May 29, 2009
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NEW YORK - Chrysler chief executive Robert Nardelli said he expects the sale of the bulk of Chrysler's assets to a group headed by Italy's Fiat Group SpA to close today, assuming the judge overseeing the automaker's bankruptcy case approves the deal.

Nardelli testified in court yesterday that he expects the required US regulatory approvals for the sale to be in place by today and international approvals to follow shortly thereafter.

But it's likely that if US Judge Arthur Gonzalez does approve the deal, attorneys representing three Indiana state pension and construction funds, which hold Chrysler debt and are opposing the sale, will appeal and force the company to postpone closing. Fiat could back out if the deal doesn't wrap up by June 15.

Chrysler LLC began its second day of testimony yesterday to convince a bankruptcy judge that selling itself to Fiat was the best way to avoid liquidation.

If Gonzalez approves the sale, as expected, the automaker could emerge from Chapter 11 bankruptcy in weeks.

The judge will hear from dissenters, including the funds that hold less than 1 percent of Chrysler's secured debt.

Attorneys for Chrysler say unloading its assets to a group led by Fiat is the only way to avoid selling the automaker piece-by-piece. They say a leaner Chrysler could shift more easily to building smaller, more fuel-efficient cars.

But many Chrysler dealers, bondholders, and former employees say they are being steamrolled by the exceptionally speedy bankruptcy court proceedings.

Bringing Chrysler and Fiat together would dramatically change the face of the country's third-largest automaker. The current plan calls for Fiat to bring a handful of its small cars to the United States, filling one of Chrysler's biggest product gaps and pleasing a White House intent on making the nation's fleet of automobiles greener.