Hearing took place April 25 over value of VEBA stake in Chrysler

Article by Anita Panait, on April 30, 2013

Both Fiat SpA and the Voluntary Employee Beneficiary Association argued their cases before a Delaware judge during a hearing that could help determine the value of the trust’s remaining stake in Chrysler Group LLC that the Italian carmaker is trying to acquire. According to court documents, VEBA estimated its Chrysler stake to be worth $11.493 billion, while Fiat appraised the trust’s holdings to have a value of $4.68 billion.

The hearing held on April 25, 2013, could help both parties achieve a common ground on the stake price negotiation by providing each side a better sense of their legal theories and the time frame for resolving the matter. The dispute started when Fiat decided to exercise its call option to buy from VEBA a 3.3 percent stake in Chrysler, offering to pay $139.7 million. VEBA, a trust of the United Auto Workers union, said in documents filed with Delaware's Court of Chancery that the stake is worth at least $342 million.

VEBA appeared to have convinced judge Donald Parsons that Fiat was improperly accounting for Chrysler's debt, which VEBA said was depressing the value of Chrysler. But later in the hearing, Parsons appeared to be indifferent to VEBA's arguments that the purchase price proposed by Fiat was barred by federal laws governing retirement benefits since it was below fair market value.

Fiat chief executive Sergio Marchionne targets to buy VEBA’s remaining stake in Chrysler to pave way for a merger between the two carmakers. A merger would create the seventh-largest auto company in the world and will provide Fiat the need cash flow and scale to offset the effects of the current recession in Europe.

If you liked the article, share on:

Comments

Recommended

The 2018 Jaguar XEL with its stretched-out wheelbase and longer doors is the newest addition to the growing list of premium sedans in China---joining the ranks of Mercedes-Benz C-Class L,...
by - November 21, 2017
Honda this week announced that its all-new 2018 Clarity Plug-in Hybrid will arrive at US dealerships with a starting price of $33,400 beginning on the first of December. Because the...
by - November 21, 2017
Lamborghini had been expected to refresh its entry-level model – the Lamborghini Huracan – in late 2018 or early 2019. But here is some good news for fans of the...
by - November 20, 2017
The Chevrolet Corvette will be turning 65 years old in 2018, and as part of the celebrations, the brand is introducing a special edition C7 – the Chevrolet Corvette Carbon...
by - November 19, 2017
Tesla revealed that with its new Semi, truck drivers can expect better experience especially with heightened safety and the lower cost of transporting cargo. Indeed, the cabin of the new...
by - November 19, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries