Filed under: Government/Legal, Fiat
We’ve already reported on the attempts of Fiat to purchase the remaining 41.5-percent stake in Chrysler, currently owned by the United Auto Workers’ VEBA healthcare trust. And while the issues still aren’t resolved, Fiat has received both a bit of good news and a bit of bad news from a Delaware judge.
The good news is that the court ruled in favor on two key arguments of Fiat’s, relating to what is a fair price for the Chrysler shares. The rulings essentially slash half a billion dollars off the price of the 54,000 shares owned by VEBA, according to a report from Reuters.
The bad news is that this makes the UAW an even more difficult opponent in negotiations. Its VEBA fund is meant to cover ever escalating retiree healthcare costs, so naturally, the UAW wants to get as much money as possible. Losing a big chunk of cash isn’t likely to make the union more cooperative.
In the end, it looks like it’s going to come down to one of two options. The rulings could encourage the two to settle matters out of court, which would likely be the fastest and most beneficial for all parties involved. The alternative is a 12- to 18-month trial, in which Fiat needs to prove that its offering for the VEBA shares is fair, while the UAW needs to convince the court that it requires a certain degree of funds to cover its healthcare obligations. We’ll keep you updated.
Court ruling to delay Fiat’s Chrysler buyout? originally appeared on Autoblog on Thu, 01 Aug 2013 13:28:00 EST. Please see our terms for use of feeds.
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