Chrysler likely to emerge from bankruptcy by July 1st

It looks like all my hand-wringing about Chrysler taking years to get out of bankruptcy was wrong. But what I didn't know then was that the bankruptcy judge was going to reject the arguments of the 40 hedge funds who controlled a mere 30 percent of the $6.9 billion in secured creditors. We now know that Judge Arthur J. Gonzalez is doing just what the government wants. And that's great news.

How so? Let's review for a minute. Those poor hedge funds, who were trying to keep their names out of the paper -- like Perella Weinberg, Stairway Capital and Oppenheimer because they feared some anonymous blog posters -- made pathetic arguments about how they were just trying to protect the poor widows and orphans who invest in their funds. The good news for them is that top hedge funders make $464 million a year so to show how much they care they can put down their violins, pull some of that cash out of their bulging pockets and give it to their poor widows and orphans.

And since Judge Gonzalez just approved the procedures for the auction of Chrysler's assets -- against the wishes of those poor hedge funds -- it looks like they have no way to get the extra few pennies on the dollar that they wanted last week when their greed threw Chrysler into the bankruptcy court. What will probably happen now is that the UAW will end up with 55 percent of Chrysler, Fiat will get between 25 and 35 percent, the U.S. -- which will fork over $12 billion -- will end up with eight percent and Canada will get two percent.

And it will all happen in time for the fireworks on July 4th.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book isYou Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.

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