Chrysler’s attempt to quickly breeze through bankruptcy court began quietly yesterday, but the real drama could come Monday when a group of renegade lenders say they will fight to block the automaker’s restructuring plan.
A crowd made up of Chrysler employees, law clerks and the media filled both a courtroom and an overflow room at the US Bankruptcy Court in Manhattan, and while the hearing was full of tension, it was short on action except for a spectator fainting at one point during the proceedings.
Corinne Ball, a bankruptcy lawyer with law firm Jones Day who is representing Chrysler, told Bankruptcy Judge Arthur Gonzalez that Chrysler was closing its plants, and its 38,500 employees were waiting on them to quickly move the case through the court.
“The sale [to Fiat] is a lifeline for workers, and we need to hit it in high gear,” she said.
Ball said the company planned to file a proposed hearing date for the Fiat sale, and to file a motion to approve $4.5 billion in immediate government financing by Monday.
Gonzalez approved Chrysler’s motion to allow the automaker to pay $48.8 million in employee and contract worker pre-bankruptcy wages, benefits and business expenses. The motion also references an estimated $86 million in employee vacation benefits that it may not ultimately have to pay.
Gonzalez also approved Chrysler’s motions that will let it continue to honor its warranties and continue its current banking practices.
But while yesterday’s hearing was largely uneventful, Monday could be another matter.
That’s because lenders that rejected the Treasury Department’s cash offer for their debt are planning to wage war against Chrysler’s restructuring plan.
As The Post reported yesterday, many of these holdouts were pressured by the Treasury to accept the government’s offer, but instead they are girding for battle and have hired White & Case lawyer Thomas Lauria as an adviser, according to one source.
Lauria did not return calls for comment.
The renegade lenders feel they were left out of the negotiating process, and by filing an objection will try to make the bankruptcy process last longer than the 30 days to 60 days that Chrysler has in mind. With Post Wires