October 14, 2013 / 10:20 PM / 6 years ago

Fiat fails to get quick trial in Chrysler stake dispute

(Reuters) - Fiat SpA FIA.MI will have to wait longer than hoped to settle the price to buy out a minority shareholder of its Chrysler business after a judge on Monday set a September 2014 trial.

A company logo is seen on a Fiat car displayed on media day at the Paris Mondial de l'Automobile, September 28, 2012. REUTERS/Christian Hartmann

The Italian automaker had sought a May trial and had offered to fly executives to the United States for depositions to speed its lawsuit with the union trust that owns a 41.5 percent stake in Chrysler.

A five-day trial will begin September 29 and run through October 3 in Wilmington, Delaware, according to an order from Donald Parsons, the judge on the Delaware Court of Chancery who is overseeing the case.

At the conclusion of the trial, Parsons would usually be expected to rule within 90 days.

The judge essentially split the difference between the two sides. The United Auto Workers healthcare trust had asked for a January 2015 trial.

The UAW became Chrysler’s second-largest shareholder when the automaker emerged from bankruptcy in 2009 and the union took a stake in place of future healthcare payments. The healthcare trust, known as VEBA, manages those healthcare benefits on behalf of the union.

In July, Parsons ruled in favor of Fiat on central legal positions in the dispute, but stopped short of ordering the trust to sell 54,154 Chrysler shares for $139.7 million, as Fiat sought.

The trust put the value of those shares at $343.1 million.

The trust has said that a decision on the price tag would require accounting experts as well as testimony by those who negotiated the agreement. That agreement mandated any disputes would be settled in the Delaware non-jury court, which is a favored venue for business disputes partly because of its reputation for speed.

The dispute covers the first of five call options that will allow Fiat to acquire 16.6 percent of Chrysler over time. In total, the difference between the two sides could amount to more than $1 billion.

Fiat runs the two automakers as a single company, but wants to buy the rest of Chrysler to squeeze out more synergies, cut borrowing costs and access some of Chrysler’s cash flow.

The case is Fiat North America LLC v UAW Retiree Medical Benefits Trust, Delaware Court of Chancery, No. 7903.

Reporting by Tom Hals in Wilmington, Delaware; Editing by Leslie Gevirtz

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