page_title: History of Chrysler
section_title: Chapter 11 reorganization
hierarchical_section_title: History of Chrysler / History / Chapter 11 reorganization
caption_attribution_description: Deutsch: Fiat 500 (2007)
context_page_description: Chrysler, a large automobile manufacturer, was founded in the 1920s and continues today under the formal name FCA US LLC. The history of Chrysler involves engineering innovations, high finance, wide alternations of profits and losses, various mergers and acquisitions, and multinationalization.
context_section_description: On January 20, 2009, Fiat S.p.A. and Chrysler LLC announced that they have a non-binding term sheet to form a global alliance. Under the terms of the potential agreement, Fiat could take a 35% stake in Chrysler and gain access to its North American dealer network in exchange for providing Chrysler with the platform to build smaller, more fuel-efficient vehicles in the US and reciprocal access to Fiat's global distribution network.
  By mid-April, as talks intensified between the two automakers to reach an agreement by a government-imposed deadline of April 30, Fiat's initial stake was reported to be 20% with some influence on the structure of top management of the company.
  However, Fiat has warned that the merger would not take place if Chrysler fails to reach an agreement with the UAW and the Canadian Auto Workers' Union. On April 26, 2009, it appeared as if Chrysler had reached a deal with the unions which would meet federal requirements, though details were not made available. Chrysler said the union agreement "provides the framework needed to ensure manufacturing competitiveness and helps to meet the guidelines set forth by the U.S. Treasury Department."
  Chrysler filed for chapter 11 bankruptcy protection at the Federal Bankruptcy Court of the Southern District of New York, in Manhattan, on April 30, 2009, and announced an alliance with Fiat.
  Both the White House and Chrysler expressed hope for a "surgical" bankruptcy lasting 30 to 60 days, with the result of reducing the company's liabilities and post-bankruptcy emergence in stronger financial shape. The submitted court documents indicated that there would be a reorganization plan presented to the court in 120 days, on August 28, 2009.  A White House official indicated that the government would provide debtor-in-possession financing for between $US 3 billion to $US 3.5 billion, and upon a completion of Chrysler bankruptcy restructuring and court proceedings, the company would be eligible to receive up to $US 4.5 billion in financing to resume operations, for total of $US 8 billion of government support.  Prior to the bankruptcy filing, Chrysler had received $US 4.5 billion in financing from the U.S. government, under a George W. Bush administration plan, in December 2008, after Congress declined to approve legislation to provide federal loans. Chrysler announced on the day of the bankruptcy filing, that during the restructuring, it would cease most manufacturing operations on May 4, 2009, and resume production "when the transaction is completed, which is anticipated within 30 to 60 days."
  On May 1, 2009, Chrysler LLC filed for bankruptcy, and LaSorda stepped down as President and Vice-Chairman and retired, despite Fiat urging him to stay on.
  On May 14, 2009 Chrysler filed with the bankruptcy court to terminate the dealership agreements of 789, or about 25% of its dealerships.
  On June 1, 2009 a US bankruptcy court approved a plan which spells out that the new Chrysler company called "Chrysler Group LLC".  The VEBA formed by the United Auto Workers Union to provide health care for Chrysler retirees will hold 55%. Minority stakes will be held by Fiat (20%) and the US (8%) and Canadian (2%) governments. Fiat has stated it plans to increase its share to 35% if Chrysler meets certain goals.
  On June 8, 2009, Supreme Court Associate Justice Ruth Bader Ginsburg, who is assigned to emergency motions arising from the United States Appeals Court for the Second Circuit, in a one-sentence order, stayed the orders of the bankruptcy judge allowing the sale, pending further order by Justice Ginsburg or the Supreme Court.
  On June 9, 2009, the Supreme Court published its denial of the applications for a stay of the sale from the three Indiana funds, allowing the sale of assets to "New Chrysler" to proceed.
  According to the two page decision and order, the Indiana funds "have not carried the burden" of demonstrating that the Supreme Court needed to intervene.  The U.S. Department of the Treasury issued a statement saying: "We are gratified that not a single court that reviewed this matte
caption: Fiat will sell its own models – such as this Fiat Nuova 500 – through Chrysler in the United States
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