Chrysler Bankruptcy: It's Official as Case No. 09-50002
April 30, 2009
By Michelle Krebs
It's official: Chrysler has now filed for bankruptcy. Case No. 09-50002.
The bankruptcy pleadings were officially filed Thursday afternoon, shortly after President Obama announced Chrysler was going into bankruptcy despite its signed alliance with Italy's Fiat.
As expected and despite Michigan's plea to have it filed in Detroit, the bankruptcy paperwork was submitted to the U.S. Bankruptcy Court's Southern Distrcit of New York in Manhattan, a popular place for bankruptcy filings largely because it handles so many and judges there grant lawyers bigger, New York-style fees.
Judge Arthur Gonzalez was assigned to the case. He also presided over the bankruptcy of Enron Corp., the third-largest U.S. bankruptcy after Lehman Brothers Holdings Inc., the largest bankruptcy ever filed only last fall, and WorldCom Inc.
Chrysler said in February it had estimated assets of $51.4 billion, which would make it the fifth-largest bankruptcy in U.S. history after Conseco Inc., according to data compiled by Bloomberg News.
In those filings, Chrysler lists its 50 largest unsecured creditors. Topping the list is Toledo-based Ohio Module Manufacturing, which Chrysler owes $70 million. Most creditors on the owed list are, in fact, suppliers of parts for car and truck manufacturing, many of whom are in dire financial straits themselves, including Visteon, which itself is teetering on the brink of bankruptcy.
Aside from the nuts and bolts suppliers, Chrysler's advertising agency, BBDO, also is on the list of unsecured creditors, ranking No. 2 in the size of its bill of $58 million.
As is typical in Chapter 11 bankruptcies, Chrysler will immediately file motions asking the court to continue payments to suppliers as well as employees and dealers. Funding to pay those bills will come from $10.5 billion in loans from the governments of the U.S. and Canada, where Chrysler has a number of plants.
The U.S. government will put in about $8 billion for which it will receive an 8 percent stake in the new Chrysler. The governments of Canada and its Ontario province will put in about $2.4 billion for a 2 percent stake.
Posted by Michelle Krebs at 1:44 PM under Business , Chrysler | Comments (0) | digg this | Seed Newsvine
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