U.S. Preparing A Chrysler Chapter 11, The New York Times Says
April 23, 2009
DETROIT -- The U.S. Treasury Department is preparing a Chapter 11 bankruptcy filing for
Chrysler that could come as soon as next week, The New York Times
is reporting.
The paper, quoting unnamed sources, says the Treasury has an agreement in principle with the United Automobile Workers union, whose members' pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing.
The Times further says Italy's Fiat would complete its alliance with Chrysler while the company is under bankruptcy protection.
The Times says the major question remaining is what happens to Chrysler's lenders, who hold $6.9 billion in company debt.
Chrysler's lenders so far have rejected offers to cut the automakers' debt and have balked at Fiat taking a 20-percent stake in Chrysler but contributing no cash. The government came back with another offer that would give lenders about 22 cents on the dollar, or about $1.5 billion, and a 5-percent equity stake in a restructured Chrysler. Lenders earlier this week asked for 65 cents on the dollar for a total of $4.5 billion and a 40-percent stake.
Chrysler and Treasury officials did not comment to the newspaper.
Some speculate a Chrysler Chapter 11 is a dry run for a General Motors Chapter 11 filing down the road.
Posted by Michelle Krebs at 1:42 PM under Chrysler , GM , News | Comments (2) | digg this | Seed Newsvine
This is what they needed to do in the first place!!
Posted by: jaguar8 | April 23, 2009 at 6:51 PM
Daimler should have to write off their share; they screwed up the company in the first place. Fiat, ethically at least, needs to put some cash into the deal as well. And how serious can they be, anyway?
They got their eye on Opel now, too. When the dust settles, we'll be able to drive down to our local Fiat dealer and buy a Dodge Rekord fercrineoutloud.
Posted by: fulcrumb | April 25, 2009 at 8:16 PM