The hearing on the most significant and controversial first day motions is scheduled for May 4, 2009 at 10:00 a.m. in Courtroom 523 at the United States Bankruptcy Court for the Southern District of New York, Alexander Hamilton Custom House, One Bowling Green, New York, New York 10004 1408. Chrysler has given notice of the agenda for the hearing. The failure to obtain a hearing on the more significant first day motions on May 1 should be viewed as a setback for Chrysler.
A first day motion hearing was held on May 1, 2009. However, the matters considered by the court were perfunctory:
- “Joint Administration” — Motion of Debtors and Debtors in Possession, Pursuant to Bankruptcy Rule 1015(b), for an Order Directing the Joint Administration of Their Chapter 11 Cases (Final Order).
- “Confirming Automatic Stay” — Motion of Debtors and Debtors in Possession, Pursuant to Section 105 of the Bankruptcy Code, for an Order Confirming the Protections of Sections 362, 365 and 525 of the Bankruptcy Code (Final Order).
- “Employee Wages” — Motion of Debtors and Debtors in Possession, Pursuant to Sections 105(a), 363, 507(a)(4), 507(a)(5) and 541(d) of the Bankruptcy Code, for an Order Authorizing Them to Pay: (A) Prepetition Regular Employee Wages, Salaries and Related Items; (B) Prepetition Regular Employee Business Expenses; (C) Prepetition Contributions to, and Benefits Under, Employee Benefit Plans; (D) Prepetition Regular Employee Payroll Deductions and Withholdings; (E) Prepetition Additional Workforce Costs; and (F) All Costs and Expenses Incident to the Foregoing Payments and Contributions (Final Order); and
- “Customer and Dealer Obligations” — Motion of Debtors and Debtors in Possession, Pursuant to Sections 105(a) and 363(c) of the Bankruptcy Code, for Interim and Final Orders Authorizing the Debtors to Honor or Pay Prepetition Obligations to or for the Benefit of Their Dealers and Other Customers, and for Related Relief (Interim Order regarding Warranties and Extended Service only).
- Cash Management” — Motion of Debtors and Debtors in Possession, Pursuant to Sections 345, 363(c)(1), 503(b)(1) and 553 of the Bankruptcy Code, for Interim and Final Orders: (A) Approving the Continued Use of Their Cash Management System, Bank Accounts and Business Forms; (B) Granting Approval of Investment and Deposit Guidelines; (C) Authorizing Banks Participating in the Debtors’ Cash Management System to Honor Certain Transfers and Charge Certain Fees and Other Amounts; (D) Permitting Continued Intercompany Transactions and Granting Administrative Expense Status to Postpetition Intercompany Claims; and (E) Preserving and Permitting the Exercise of Intercompany Setoff Rights (Interim Order).
The key to a “successful” bankruptcy of Chrysler is speed. The Obama administration has promised a new Chrysler emerging from bankruptcy within 60 days. This is certainly possible. However, the speed at which the case moves is largely dependent on the speed at which the court is willing to allow the case to move.
Why does the delay of 3 days make any difference? Although the filing had been expected by Chrysler’s pre-petition lenders and other creditors, the nature and content of the first day motions was unknown. The 3 days of additional time will allow antagonists and adversaries to develop well planned and briefed challenges to certain of the first day motions.