“GM Argentina is a legally distinct entity, and is economically and
financially solvent thanks to our healthy balance in the region,” GM Argentina said in a statement posted online.

GM’s Latin American operations, including its business in Brazil, appear to be one of the few bright spots for the U.S. automobile maker.

GM Argentina President Edgar Lourencon told local media Monday that the company’s operations in Argentina and Brazil accounted for 60% of the $1.3 billion in profit generated by the company’s Latin American units last year.

“GM Argentina maintains its commitment to invest in the country, developing a new compact regional model in our Rosario industrial plant whose production will begin towards the end of 2009,” the company said.

In 2007, then GM Chief Executive Rick Wagoner announced plans to invest $500 million in Latin America. The plan called for investing $400 million to develop the new product line, which would be sold in Latin America and exported to other emerging market countries.

The investment was to be divided between GM’s Rosario plant in Argentina and the Sao Caetano do Sul plant in Brazil, with each plant receiving about $200 million to modify and expand production lines for the new vehicle.

Lourencon said Monday that GM will receive fresh funds from the Argentine government to help carry out the originally announced plan for the Rosario plant.

Argentine President Cristina Fernandez is expected to announce that the government will provide around $55 million in funding to help GM develop a new small vehicle.

Multiple media outlets have reported that Italy’s Fiat SpA (FIATY) has
offered to take over GM operations both here and in Brazil. A pokesperson for GM Argentina declined to comment about such an offer and Fiat Argentina couldn’t be reached for comment.

Despite GM Argentina’s strength relative to its parent, the company has suffered from Argentina’s economic slowdown and a sharp decline in demand for new cars.

Argentina’s auto sales fell 29.17% in April compared with the same month a year ago, according to the car dealership association Acara. April’s decline was more than triple the annual decline seen in March, when sales fell 8.7%.

Meanwhile, Argentina produced 37,262 cars in April, down 31.8% on the year, according to the automotive manufacturers association, or Adefa.

In an order Tuesday, U.S. Bankruptcy Judge Arthur Gonzalez in Manhattan found the sale order should be heard by the Second Circuit, skipping the usual path of having the case first reviewed by a U.S. district judge. Gonzalez approved the sale late Sunday.

The judge found that skipping the district-court level “is appropriate
because this case involves a matter of public importance, and an immediate appeal may materially advance the progress of this case.”

The deal must close by June 15.

“We are pleased that any appeal of the Judge’s approval of the sale will be heard by the Second Circuit Court of Appeals, enabling a resolution at the earliest opportunity,” said Shawn Morgan, a Chrysler spokeswoman. “Given the enormity of the situation and the fact the any delay in the closing is costing $100 million a day, we look forward to completing the transaction with the new company formed through the alliance with Fiat as quickly as possible.”

In a final order issued late Monday, Gonzalez granted Chrysler’s request to limit the automatic stay period for an appeal. The judge ruled the sale order would become effective at 12 noon Friday, allowing Chrysler to close the sale then.

Chrysler had asked that the sale be allowed to go forward at 9 a.m. EDT Thursday.Typically, an automatic 10-day stay is granted for bankruptcy appeals, unless it is shortened by the presiding judge.

Indiana pension funds – the Indiana State Teachers Retirement Fund, the Indiana State Pension Trust and the Indiana Major Moves Construction Fund – filed a notice of appeal Monday, saying they intended to appeal to this district court. Chrysler separately asked Monday that the case go directly to the circuit court.

The Indiana funds have argued the sale of Chrysler is unconstitutional,
saying the plan upends the rights of senior lenders to be paid off before junior creditors. The Indiana funds own about $42 million of the company’s senior debt.

The Indiana funds also contend that the U.S. Treasury Department doesn’t have the authority to lend bankruptcy financing under the Troubled Asset Relief Program because Chrysler isn’t a financial company.Under Chrysler’s plan, Fiat would initially own 20% of the new company, though it would have the option of increasing its stake to as much as 51%. The United Auto Workers union would initially get a 55% stake, while the U.S. and Canada, which are lending Chrysler $4.9 billion during the bankruptcy, would own 8% and 2%, respectively.

Senior lenders owed $6.9 billion would receive $2 billion, giving them a
recovery of about 29 cents on the dollar. The Indiana funds say that, under Chrysler’s plan, creditors with less seniority, namely the UAW, would see a better recovery. The UAW’s health-care trust has an unsecured claim against Chrysler for about $10.5 billion. In addition to the equity stake in Chrysler that the trust would receive, it would
also get a $4.5 billion note.