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Our team over at GMInsideNews is reporting that the judge overseeing the Chrysler bankruptcy proceedings has thrown out the arguments made by the hold-out bondholders. By removing the only objection to the process, the bankruptcy proceedings can now be fast-tracked and the Fiat merger can go ahead.

During President Obama's press conference last week, when he announced that Chrysler would file for Chapter 11, it was made clear that the proceedings would be quick. Obama also spoke out to the group of bondholders who refused to accept the government’s cash-for-debt deal that would see the companies receive just a third of what they have lent Chrysler.

The group of bondholders, comprised of several hedge funds that hold just 10 percent of Chrysler's debt, made the argument that as the major bondholders who had agreed to the government's deal (including J.P. Morgan) had accepted bailout funds from the government, they should be excluded from the process.

That argument was reportedly thrown out this morning in what must be record time for a bankruptcy case. Yesterday Judge Arthur Gonzales sped up the process by threatening that the unnamed debt holders had to reveal themselves publicly - something they were loath to do as many had complained of death threats.

The next part of the process will be the sale of assets, which has essentially already been outlined by the parties involved in order to expedite the process. It is expected that the U.S. government will purchase the majority of the assets in order to set up the New Chrysler - which is reported to be called Chrysler Acquisition Corporation.

With the major objectors removed from the process, Chrysler could be out of bankruptcy court by the end of the month!

Apparently President Obama was not bluffing when he said the Chapter 11 proceedings would be "quick and surgical." That seemed unlikely considering the parties involved and the how the legal system works, but President Obama and the legislative branch seem to have a willing partner in the Judicial branch and Judge Gonzales.

More: Chrysler Bankruptcy Plan All But Approved on AutoGuide.com
 

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Iacocca losing pension, car in Chrysler bankruptcy

Iacocca losing pension, car in Chrysler bankruptcy

NEW YORK (Reuters) – Lee Iacocca, the car executive credited with saving Chrysler from bankruptcy in the 1980s, is to lose a big chunk of his pension and a guaranteed life-long company car due to the U.S. automaker's bankruptcy filing two decades later.
Chrysler CEO Robert Nardelli told a U.S. bankruptcy court on Thursday that Iacocca's pension would be among the obligations Chrysler will no longer have to pay if it gets bankruptcy court approval to sell itself to a "New Chrysler" to be owned by its union, the U.S. and Canadian governments and Fiat SpA (FIA.MI).
Iacocca, the storied former chairman and CEO who revived Chrysler in the 1980s and appeared in car commercials, has participated in a supplemental executive retirement plan that was comprised of non-IRS qualified pension funds and is subject to bankruptcy.
The claim is unsecured, and typically would be paid after secured creditors in a bankruptcy, but even secured creditors are not expected to get full recovery in a Chrysler bankruptcy that will see hundreds of dealerships shuttered and plants closed.
Chrysler has also written to former executives saying that as a result of its April 30 bankruptcy filing it will stop a program that furnished company cars to former executives and directors.
Iacocca, famous for the phrase "If you can find a better car, buy it," and other senior executives who were part of the program are being asked to return their cars to a Chrysler marshalling center or arrange to pay for them, according to the document.
Chrysler said it regretted the action "in light of the many contributions these individuals have made to Chrysler over the years" and that the "New Chrysler" does not expect to reinstate the car program.
 
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