Chrysler moves closer to exiting bankruptcy protection

— -- Chrysler predicted Monday that it could emerge from bankruptcy-court protection this week now that a federal judge has cleared the way for the automaker's sale.

Bankruptcy Judge Arthur Gonzalez on Sunday approved the sale of most of Chrysler's assets to Italian automaker Fiat, a union-backed trust and the U.S. and Canadian governments. The sale was part of the restructuring plan backed by the White House, which has lent the automaker almost $5 billion since its Chapter 11 filing April 30.

Chrysler spokeswoman Shawn Morgan says the company filed a request seeking approval of the sale as early as Thursday afternoon. The automaker wants a hearing by Wednesday on the matter so that it can close the deal well before the June 15 deadline set by Fiat.

President Obama said the court's decision gave the automaker "a new lease on life" and would allow Chrysler to "successfully emerge from bankruptcy as a new, stronger, more competitive company for the future."

Chrysler says the deal could fall apart if it's not hammered out quickly.

Lawyers for three Indiana pension funds are attempting to stand in the way, however. The funds filed a notice in U.S. District Court in Manhattan on Monday appealing the bankruptcy court's approval of Chrysler's sale.

Indiana Treasurer Richard Mourdock says he is "disappointed but not surprised" by the bankruptcy court's ruling, which he says means Indiana State Police retirees, retired teachers and taxpayers would get only 29 cents on the dollar for the money they lent Chrysler.

"This is about much more than the Chrysler Corp. It's about whether secured creditors have the same standing that they've had for hundreds of years," Mourdock says.

Kathryn Harrigan, a Columbia Business School corporate strategy professor, agrees.

"This is nuts," she says. "If secured lenders don't come first, who would lend anymore?"

Chrysler dealers also are weighing in on the automaker's sale. Those who are going to lose their franchises have objected. Gonzalez is holding a hearing Wednesday to address Chrysler's plans to terminate almost 800 of its franchise agreements. A congressional panel Wednesday will also question Chrysler executives and dealers about the plans.