Chrysler sold to Fiat-led "New Chrysler" after historic court proceedings
Client(s) Chrysler LLC
After a historic battle all the way to the United States Supreme Court, Chrysler LLC sold substantially all of its assets to Fiat-led "New Chrysler" (Chrysler Group LLC) on June 10, 2009, providing the opportunity for its iconic brands and U.S. operations to survive.
The transaction resulted from intensive negotiations involving Fiat, the U.S. Department of the Treasury, the Presidential Auto Task Force, the United Auto Workers union (UAW), the Pension Benefit Guaranty Corporation (PBGC), Chrysler Financial, GMAC Financial Services, and the holders of almost $7 billion of secured Chrysler bank debt. These negotiations led to an accelerated court process which commenced on April 30, 2009, when Chrysler LLC filed for protection under chapter 11 of the Federal Bankruptcy Code and sought approval for an expedited bid process and sale.
The assets were sold in exchange for $2 billion in cash and the assumption of numerous Chrysler debts by New Chrysler. The transaction was consummated pursuant to a sales order by the U.S. Bankruptcy Court in Manhattan. Although it involved substantial filings and hearings in the Bankruptcy Court and a massive effort by Jones Day bankruptcy and litigation specialists, the evolution, design, and execution of the sale was very much an M&A deal, requiring the skill and experience of a large transactional team from Jones Day, as Chrysler's restructuring counsel.
