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Court Sends Fiat Dispute About Chrysler Stock Price to Trial
A Delaware Chancery Court judge has agreed with Fiat SpA on two key points of its dispute with a union-run retiree healthcare trust about the value of Chrysler shares the trust owns.
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A Delaware Chancery Court judge has agreed with Fiat SpA on two key points of its dispute with a union-run retiree healthcare trust about the value of Chrysler shares the trust owns.
The dispute centers on how to interpret a contract that describes how share value should be calculated. Judge Donald Parsons Jr. says Fiat is interpreting the formula correctly. But he ruled that several remaining issues should be decided in a trial.
Analysts have said a trial could delay by as much as a year Fiat's acquisition of the trust's 41.5% Chrysler stake. The Italian company, which owns the balance of Chrysler, is eager to merge the two carmakers. Analysts suggest that Fiat might now be more willing to settle out of court to avoid the long wait.
That company has options to buy roughly 3.3% of Chrysler from the trust every six months. Fiat sued the trust last September for refusing to sell the first tranche for $140 million in July. The minority shareholder says those shares are worth at least $342 million.
In January and earlier this month, Fiat offered to buy additional 3.3% stakes for $198 million and $255 million, respectively.
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