The New York Bankruptcy Court currently deciding the fate of Chrysler is expected to approve the sale of  its "good" assets into the "New Chrysler" (NewCo) entity that will have Fiat as a 20 percent shareholder after the hearing of more than 300 objections is completed today. Amongst the ranks of the objectors is a group of Indiana state pension and construction funds which are disputing the way the whole bankruptcy has been handled and influenced.

However wrapping up the Chapter 11 bankruptcy process within 30 days will be a major victory for the Obama Administration which had set a 30- to 60-day target for the procedure to be completed, a timescale that many bankruptcy experts had thought to be unfeasible.

Yesterday Judge Arthur Gonzalez presided over a session which lasted around ten hours and primarily focused on a hearing with Chrysler President Tom LaSorda on the stand. Today the American carmaker's outgoing CEO Bob Nardelli will appear in front of the court. Yesterday Nardelli wrote in a submission that: "The sale would strengthen Chrysler for the long term, benefiting all constituents, including U.S. taxpayers, employees, creditors, dealers, suppliers and secured lenders."

"The task force made every responsible effort to avoid bankruptcy, including a last-minute effort to achieve 100 percent consent of the senior lenders," the U.S. Treasury Department said in a statement. Also in the courtroom yesterday was Fiat Powertrain Technologies CEO Alfredo Altavilla who revealed that as well as Fiat CEO Sergio Marchionne being appointed CEO of the new Chrysler entity, former Exxon-Mobil Corporation Vice Chairman Lucio Noto and himself would be appointed directors of the new board. "This is a strategic deal for Fiat, Altavilla told the court. "We are here for the long run," he added.

The Bankruptcy court should approved the sale of Chrysler's good assets to a new company that will initially have the UAW as the main shareholder, with a 55 percent share, followed by Fiat, with a 20 percent share. The U.S. and Canadian governments will split the balance of the remaining stock between themselves. Fiat's stake will quickly increase to 35 percent once certain targets have been met and will have an option to reach 51 percent once the new Chrysler company has in theory paid back the public funds that it has already received and the further loans it will receive to help it through the coming months.