Judge: Chrysler has good case for franchise cuts

NEW YORK (AP) – NEW YORK (AP) - The judge overseeing Chrysler's bankruptcy case says the automaker has a good case for the termination of 789 of its dealer franchises as part of its ongoing restructuring.

The judge in New York is hearing testimony today from Chrysler dealers and executives. Legal arguments follow on Tuesday. It's not clear when he will rule on Chrysler's motion, or if the hearing will delay Chrysler's plans to terminate the franchises effective Tuesday.

Just under 20 Chrysler dealers were sworn in at the beginning of today's hearing.

Late Sunday, the judge issued a ruling approving the government-backed sale of most of Chrysler's assets to a group led by Fiat. But the sale has been stayed pending an appeal filed by three Indiana state pension and construction funds.

Arguments before the U.S. Court of Appeals for the Second Circuit are slated
for tomorrow afternoon.