Chrysler won interim approval from a US bankruptcy court to access a $4.5 billion (€3.37 billion) loan as it tried to move ahead in its planned alliance with Fiat, while the Italian carmaker advanced its bid for General Motors' European Opel brand.
Also, a group of investment funds sought to block Chrysler's plans with Fiat while United Auto Workers President Ron Gettelfinger said a union-aligned health care trust would work quickly to sell shares it would receive in a new Chrysler as soon as it is in a position to do so.
The UAW health care trust, which is likely to receive a 55 per cent stake in a new Chrysler under a sale plan the carmaker filed with the US Bankruptcy Court, would be very stressed initially through its acceptance of Chrysler equity for part of the funding of the trust.
A bankruptcy judge approved Chrysler's request to access the funds from US and Canadian governments, known as debtor-in-possession financing, as well as requests for the company to pay essential suppliers, dealers and its taxes.
Chrysler also had asked the US Bankruptcy Court for a swift hearing into its planned sale of its best assets into a new company owned by its union, Fiat and the government, eliciting immediate objections from some dissenting secured lenders.
The dissenting lenders led by Oppenheimer Funds and Stairway Capital argued in a New York bankruptcy court that the sale proposal was "orchestrated entirely by the US Treasury and foisted upon the debtors".
A lawyer for the group, Tom Lauria, said some identified publicly in the politically charged reorganisation have received death threats "which they perceive as being bona fide." Those lenders have notified police and the FBI, he said. President Barack Obama called the dissenters "speculators" in public criticism last week for refusing to join Chrysler's biggest banks in a government-brokered deal to wipe out Chrysler's $6.9 billion debt and move forward with the Fiat alliance.
Chrysler asked US Judge Arthur Gonzalez to schedule a hearing as soon as May 21 to approve a $2 billion sale of most of the carmaker's assets.
"Absent a prompt sale, approved in the coming weeks, the value of the debtors' assets will rapidly decline and the ability to achieve a going concern sale will be lost," Chrysler said in court documents supporting the sale to Fiat.
Chrysler's bankruptcy, one of the biggest US company bankruptcies ever, is widely seen as almost a dry run for a potential reorganisation of GM. The No.1 US-based carmaker, which like Chrysler is surviving on government bailout money, faces its own restructuring deadlines on June 1 and is trying to restructure its business in the US and overseas.
This includes the potential sale of its German-based Opel unit, possibly to Fiat.
But Fiat's interest in the brand has a rival. Canadian parts maker Magna International confirmed it was in talks with GM and the German government about taking a minority stake in Opel.
Fiat chief executive officer Sergio Marchionne wants the Italian carmaker to merge with Opel, then spin off and list the merged entity.
Combining with Chrysler as well as Opel, which makes up 80 per cent of GM Europe's annual sales of $34.4 billion, fits Mr Marchionne's strategy of bulking up Fiat to survive the crisis engulfing the auto industry.
"Industrial logic-wise, Opel makes a lot more sense than Chrysler. The big hurdle we can see is social cost," Nomura International analyst Michael Tyndall said.
"It's all very well to say they compete broadly in the same markets with similar platforms and there may be economies of scale. But the broad translation of economies of scale is fewer jobs and I'm not sure if the Italian or German governments have the appetite for the job losses a merger would entail."
The biggest opposition to a deal is likely to come from German and Italian unions.
Opel employs around 25,000 people at its factories in Germany.
Germany's finance minister, Karl-Theodor zu Guttenberg, said Fiat's plan was "interesting", but needed a closer look following talks with Mr Marchionne. Mr Guttenberg said Fiat was seeking Europe-wide state guarantees as part of the GM Europe deal.
In fresh reminders of the dire state of the global car industry, French new passenger car sales fell seven per cent in April and Belgium reported a 22.8 per cent drop.
Spanish carmaker association Anfac said car sales in the country fell 45.6 per cent in April, declining faster year-on-year than in March, which saw a 38.7 per cent drop.