Despite its requests for a trial next May, Fiat last week learmed it would have to wait about a year for a US court to rule on the value of Chrysler stock it wants to buy from the UAW union healthcare trust., a judge decided recently.
According to the Detroit Free Press, Delaware Chancery Court Judge Donald Parsons scheduled a five-day trial for the dispute over the price of the Chrysler shares to start on 29 September. The trial is designed to settle a prolonged lawsuit by Fiat against the UAW Retiree Medical Benefits Trust.
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That was nine months later than Fiat had requested and about six months earlier than the UAW trust requested, the paper noted.
The order is seen as a setback for Fiat, which is trying to acquire 100% of Chrysler, because it will take longer unless the two owners of Chrysler settle their dispute.
The date puts more pressure on Fiat to either settle the dispute or move forward with a public stock offering that could occur early next year.
The trust needs to convert its Chrysler shares to cash to cover the medical benefits of about 61,000 retired UAW-Chrysler workers.
Fiat owns 58.5% of Chrysler. During the last 18 months, Fiat has exercised options to buy an additional 9.9% stake in Chrysler but the UAW trust has rejected the offered price, the paper noted. That price, if applied to all of the UAW trust’s stake, would be about US$3.2bn. Those managing the trust argue the shares are worth about $4.3bn, according to BernsteinResearch analyst Max Warburton.
The Detroit Free Press said Chrysler filed a registration statement with the US Securities and Exchange Commission on 23 September that is under review. An initial public offering could occur early next year unless the two sides settle their differences.
