Chrysler LLC heads to U.S. bankruptcy court Friday morning to obtain permission to continue paying employees and meeting customer and dealer obligations against a backdrop of mounting opposition from certain of its lenders.
A group of about 20 lenders that balked at the terms of the government-brokered deal said late Thursday it plans to object to the company's reorganization plan, which will put Chrysler's core assets into a new company owned by its workers, Italian car maker Fiat SpA and the U.S. and Canadian governments.
Chrysler filed for bankruptcy on Thursday in New York and disclosed the plan. The plan, however, requires approval by the U.S. Bankruptcy Court.
The company has been pushing for a prompt hearing, saying in court documents that the proposed transaction is the only means to avoid liquidation of the 83-year-old car maker.
Ahead of Friday morning's hearing, the courtroom of Judge Arthur Gonzalez, who was assigned the case, was filled largely with lawyers and their assistants, with no standing room left an hour before the start time.
On the agenda for Friday's hearing are so-called first-day motions that will enable Chrysler to continue operating, such as its right to continue to use its cash management system.
The company has 38,500 hourly and salaried workers in the United States It has 23 manufacturing plants and facilities and 15 parts depots in the there and 3,200 dealers employing 140,000 people.
The case is in re Chrysler LLC, U.S. Bankruptcy Court, Southern District of New York, No. 09-50002.
(Reporting by Caroline Humer, additional reporting by Thomas Hals; Editing by Steve Orlofsky)