Chrysler To File For Bankruptcy
Bankruptcy
Storied Detroit automaker Chrysler will file for bankruptcy in New York court almost immediately, senior administration officials said Thursday.
"We worked very hard to keep this company out of bankruptcy," one official said on a conference call with reporters. However, not all of Chrysler's secured creditors were on board with the agreement. "With reluctance, we've made the decision to go through with this surgical bankruptcy process."
Under the terms of the arrangement, Chrysler will be placed in a "quick rinse" bankruptcy, which officials expect to last about 30 to 60 days. The government will provide $3 billion to $3.5 billion so-called "debtor in possession" financing to keep the company running, and another $4.5 billion in exit financing. In addition, the Canadian government will provide $1 for every $3 of U.S. taxpayer money on the line.
The government is also replacing Chrysler's board, but it is not yet clear who the replacements will be. Officials said Chrysler Financial, the company's captive financing arm, didn't have the resources to support a restructuring. Instead, GMAC will be the company's new financing source, with support from the U.S. government. Italian automaker Fiat will engage in a partnership agreement with the company.
Fiat's stake would initially be 20%, but it could increase, in 5% increments, as it meets three government thresholds: helping Chrysler establish a distribution network outside of North America, building a fuel-efficient engine in a Chrysler U.S. Factory, and building a small car in a U.S. Factory. Once taxpayers are repaid, Fiat could boost its stake above 50%.
Related listings
-
Wamu Sues jpmorgan to Recover $4 Billion in Deposits
Bankruptcy 04/29/2009Lawyers for Washington Mutual Inc. have filed a bankruptcy court complaint against JPMorgan Chase & Co. over some $4 billion in disputed assets. Seattle-based WaMu, which filed for Chapter 11 reorganization along with its Washington Mutual Invest...
-
Investors take Madoff to bankruptcy court
Bankruptcy 04/14/2009A small group of investors took Bernard Madoff to bankruptcy court on Monday, saying the disgraced financier bilked them out of nearly $64 million. A Manhattan judge cleared the way for the newly filed Chapter 7 petition last week by granting a reque...
-
Vick to make first court appearance in bankruptcy
Bankruptcy 04/02/2009A judge wants to know more about suspended NFL star Michael Vick's bankruptcy plan, which is based on his goal of resuming his football career when he gets out of jail. Vick is scheduled to make his first personal appearance in a Virginia bankruptcy ...
New Rochelle, New York Personal Injury Lawyers
If you or a loved one has been injured in an accident, contact Kommer, Bave & Ollman, LLP, in New Rochelle, New York, immediately. We can answer all your questions and work with you to determine if you have the grounds for a personal injury lawsuit. The attorneys at our firm are determined to resolve even the most difficult of cases. We will work closely with you to determine the best course of action to get your claim or case resolved in the most efficient way possible. We will fight for your right to compensation! No one should have to suffer a financial burden from the result of another person’s carelessness. The attorneys at Kommer, Bave & Ollman, LLP will aggressively fight to ensure that justice is served on your behalf.