Fiat, the largest carmaker in Italy failed today to persuade a judge to set the value of some Chrysler shares now owned by the United Auto Workers trust, delaying a plan to combine the two automakers.
Delaware Chancery Court Judge Donald Parsons stopped short of ordering VEBA, the United Auto Workers trust, to sell 54,154 Chrysler shares to Fiat for $139.7 million.
Fiat officials haven’t shown the union fund “is required to deliver the shares in return for Fiat’s payment of $139.7 million,” Judge Donald Parsons said in the decision.
“It would be premature for me to enter an order requiring” the fund to hand over the shares, the judge said.”Certain questions still needed to be answered through testimony at a trial.”
Shortly after, Fiat said “it looks forward to resolving the few remaining issues in the litigation through the discovery requested by the court”. Fiat “remains confident that those residual issues will also be resolved in its favor.”
Problem is that court’s decision will delay Fiat’s plan to buy up all of Chrysler. A trial is likely to take between a year and 18 months, said a person familiar with the matter. However, another person said the lengthy process makes it more likely that Fiat and VEBA will reach an out of court settlement on the dispute.
Marchionne, who runs both Fiat and Chrysler told analysts yesterday Fiat is “not close” to an agreement with VEBA over the value of the shares and it “remains available” for talks.