Chrysler speeds through bankruptcy

The speed at which Chrysler LLC is working its way through bankruptcy court in New York may be unprecedented, a bankruptcy expert said.

Chrysler filed for Chapter 11 protection from its creditors April 30, but Judge Arthur Gonzalez is scheduled to rule Wednesday on whether or not a group led by Italian automaker Fiat SpA can purchase much of the company, The Washington Post reported Wednesday.

A sale of substantially all of (Chrysler’s) business in this short time frame is probably unprecedented, Howard Seife, global chairman of Chadbourne & Parke’s bankruptcy and financial restructuring practice, told The Washington Post.

On Tuesday, U.S. District Judge Thomas Griesa refused a motion to stay the sale submitted by Indiana pension funds, which hold about $42 million in Chrysler debt.

A senior government official said the court was not going to let the flea wag the dog.

When a bankruptcy judge looks at the lineup and says ‘I’ve got about $10 billion of debt and the last remaining objector has a $42 million claim,’ it is not a close call, the official said.

As the case has raced through court, one of the major problems avoided has been a sharp drop in sales. J.D. Power and Associates said Chrysler sales held up in May compared to April.