Indiana Pension Funds Jump On Marchionne's Promise
Sergio Marchionne’s statement that “we would never walk away” from the Chrysler deal may not be having quite the effect he wanted. After all, the entire justification for the Government cramdown of bondholders and “auction with one bidder” sale to Fiat is that Chrysler will unravel if the the sale isn’t implemented post-haste. In a new filing to Supreme Court ( PDF via SCOTUSBLOG), the Indiana funds argue that:
The Debtors (and the United States) have advanced the position throughout this case, including in its papers filed with this Court, that the section 363 Sale at issue here had to close before June 15 or Fiat would exercise its right to withdraw and the entire transaction would collapse. The courts below relied on such arguments and testimony in moving this case forward at an unprecedented pace . . . Whether or not these arguments and testimony were ever true, the Indiana Pensioners respectfully submit that the risk of termination by Fiat if the transaction does not close by June 15 no longer provides a basis for driving the timing of these proceedings.
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The Supreme Court injunction was just lifted. The sale can proceed.
Seems to me that Super-Sergio knew exactly what he was doing: don't panic on the Indiana issue and reassure that Fiat are serious long term players. The idea that they are just hanging around to get US gov money is so short sighted. Fiat are going to have to invest huge management energy to make a Chrysler turnaround work. There'll be no ROI on this deal for years and the risks are enormous. That's hardly the actions of a short term money grabber is it?