Posted on 04/23/2009 4:30:28 PM PDT by An Old Man
Developing story out of the NYT.
The Treasury Department is preparing a Chapter 11 bankruptcy filing for Chrysler that could come as soon as next week, people with direct knowledge of the action said Thursday.
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, said these people, who asked for anonymity because they were not authorized to discuss the case.
The only major question that remains unresolved is what happens to Chrysler’s lenders, who hold $6.9 billion in company debt. The government’s most recent offer, presented Wednesday, would give the company’s lenders about 22 cents on the dollar, or $1.5 billion, and a 5 percent equity stake in a reorganized Chrysler. Earlier this week, a steering committee of the lenders proposed that they receive 65 cents on the dollar, or $4.5 billion, and a 40 percent equity stake.
Officials at Chrysler and the Treasury were not immediately available for comment.
A bankruptcy filing by Chrysler would be the first among Detroit’s troubled automakers, who have been mired in a devastating sales slump since last fall. Treasury is also working with General Motors to prepare a possible bankruptcy case, and the terms of a Chrysler filing might offer a glimpse into the shape of G.M.’s own filing.
Some analysts questioned whether the Treasury’s steps to prepare a bankruptcy case were an effort to put more pressure on lenders, with which it has exchanged proposals meant to reduce Chrysler’s debt. Chrysler faces an April 30 deadline from the Treasury, while G.M. faces a June 1 deadline in its own efforts to draft a new restructuring plan.
Nothing like using Chrysler with its millions of workers as leverage in negotiations with GM's (GM) bondholders. Too bad there is no Chrysler public stock that can be short squeezed to oblivion.
What can I say.
US Treasury now in the business of filing bankruptcy for corporations. Unbelievable what is going on.
Great, so now I take my truck to Mr ObamoWrench?
The gubmint buys out these company’s with our money, then declares bankruptcy to fleece us of Billions.
FUBO! Geihtner too!
I don't like the way that reads.
Chrysler can't prepare their own documents?
Nice that all the union crap is untouched....
No, that’s next week....
“Goverment” You will now pay for their pensions and retiree health care benefits and GM in the future too.
Has anybody checked to see if Geithner filed his taxes this year or filed for an extension?
No Kidding. This is all incredible. All I can say it WTF. The American people, as a whole, are dumber than shit.
Hey. Who knows? He runs the joint now. :(
Sigh....
I remember back in the olden days, when they were telling us what a disaster it would be for any of the car companies to declare bankruptcy.
I suppose, though, that if the government has standing to oust the president of a private corporation, that it can throw a private corporation into bankruptcy.
I'm sort of curious how that works myself.
What about the salaried employees?
Auto stocks soar on news...
Fat, dumb and happy yesterday; fat, dumb and unhappy today.
Quite a few people saw this [government and its puppet-master too big for its britches] coming. The only mysteries lie in the details of "when" and "how."
Golden Parachutes?
If you want to git yer britches in a wad, follow up on what these fine folks are considering:
Pacific Grove California Explores Bankruptcy Over Pension Issues
In an effort to rein in pension costs, Pacific Grove California Explores Bankruptcy.
If they are successful we better start building Bomb Shelters again.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.