A U.S. Bankruptcy Court judge decided to postpone his decision regarding Chrysler's bankruptcy filing after objections from some of the automaker's lenders. Bloomberg News reports:
A group of Chrysler LLC’s secured lenders is seeking to block the bankrupt company’s plan to sell its business at auction this month, arguing that the U.S. government is violating federal law in order to preserve the automaker.
The group, calling itself Chrysler’s non-TARP lenders, in reference to the Troubled Assets Relief Program, seeks to block the proposed sale to an alliance led by Fiat SpA, as well as a request by the U.S. automaker for approval of a $4.5 billion Treasury loan to finance the reorganization. The group said secured lenders who agreed to the Fiat deal, such as JPMorgan Chase & Co., Citigroup Inc. and Goldman Sachs Group Inc., were conflicted because they had also accepted TARP funds.
The group also feels it did not get enough time to review Chrysler's proposed sale to Fiat. Dealbook adds, "Moreover, they said the sale was really a reorganization plan in disguise — one that flouts the basic rules about which creditors get priority under the federal bankruptcy code. The proposed sale attempts to put social goals ahead of bankruptcy law, and should not be approved, the objection said."
Well, one player is making progress: Chrysler's lawyers are—in billing. According to the American Lawyer, the firm of Jones Day has already billed $18.5 million.