A revamped Chrysler is poised to exit bankruptcy reorganization as soon as Monday after a U.S. judge approved the $2 billion sale of the bulk of its assets to the group led by Fiat SpA (FIATY).

Judge Arthur Gonzalez of the U.S. Bankruptcy Court in Manhattan rejected arguments from some Chrysler creditors and dealers seeking to block the deal, noting in his 47-page judgment that Fiat was the only viable alternative to the immediate liquidation of the company.

"With this approval, the new Chrysler Group is created and can prepare to launch as a vibrant new company formed with Fiat," said Chairman and Chief Executive Robert L. Nardelli.

President Barack Obama said the approval of the Chrysler-Fiat combination has given the auto maker a "new lease on life" and will save thousands of jobs as the company emerges stronger and more competitive.

The ruling, just 32 days after Chrysler was forced to file for protection, is viewed as a partial dress rehearsal for the more complex reorganization of General Motors Corp. (GM), which filed in the same court earlier Monday.

Disgruntled Chrysler dealers faced with being dropped by the company and a group of Indiana pension funds had been the main barrier to the company's court exit following a marathon three days of hearings last week. Gonzalez rejected their efforts to block a sale of Chrysler assets to the Fiat-led group.

Chrysler Group LLC will be controlled by the U.S. and Canadian governments, a union-run trust fund, and the Italian group, whose efforts to buy GM assets were thwarted over the weekend.

Chrysler dealers will have an opportunity to press their claims at a hearing scheduled for June 3 but, like the Indiana funds, failed to block the Fiat deal.

The judge accepted Chrysler's argument that the value of Fiat pact and its reorganization exceeded its liquidation value, noting that synergies between the Italian and U.S. groups may see the enterprise worth more than the sum of its parts.

Because of the overriding concern of the U.S. and Canadian governments to protect the public interest, the terms of the Fiat transaction present an opportunity that the marketplace alone couldn't offer, and that certainly exceeds the liquidation value, he wrote.

Gonzalez also accepted that Chrysler's largest creditors hadn't breached their fiduciary duty in accepting the tough settlement for their debt.

The pact reached just before Chrysler's April 30 court filing followed weeks of often acrimonious exchanges between lenders and the U.S. government's auto task force, mirroring events at GM, which secured backing for its proposed reorganization from a majority of unsecured creditors on Saturday.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com

-Tess Stynes of Dow Jones Newswires contributed to this story.