Chrysler Bankruptcy???

**ndavies** · April-29-09, 03:09 PM

Looks like it may happend tomorrow. [[04/30/09)

http://www.bloomberg.com/apps/news?p....wQ&refer=home

How many companies will be swept in on Chrylser's coattails?

Stosh · April-29-09, 03:17 PM

http://freep.com/article/20090429/BU...rtnership+deal

**ndavies** · April-30-09, 07:34 AM

Even the deal with Fiat isn't going to keep them out of bankruptcy.

http://www.freep.com/article/2009043...ter+talks+fail

**Novine** · April-30-09, 08:59 AM

On the radio this morning, they said that many of the hold-outs likely have financial interests in seeing Chysler go into bankruptcy. Those would include financial interests in Ford and GM and credit-default swaps to cover losses when Chrysler goes into bankruptcy. As the commenter stated, those hedge funds may have little interest in seeing Chrysler live to see another day.

lilpup · April-30-09, 11:17 AM

You know full well that those who didn't allow a deal to go through have their butts covered by credit default swaps and benefit more from a bankruptcy than they would from a negotiated deal.

**Danny** · April-30-09, 11:23 AM

This is truly the end of Chrysler! Chapter 11 bankruptcy is theirs to clean up.

**Crumbled_pavement** · April-30-09, 11:31 AM

Who will be the next automaker to fall vicitm as Detroit and Michigan wither away to nonexistance?

Not impossible, inevitable!

**rajdet** · April-30-09, 12:58 PM

I don't know anything about bankruptcy laws, but I did feel some level of comfort and confidence listening to Obama's speech today. I do hope Chrysler, the UAW, the vendors, and dealers come out of this stronger. As for the investors who held up the deal, I hope they get exactly what they deserve. I don't get it when my 401k tanked I wasnt happy but I made those investments and took on that risk. I knew going in there was a chance I could loose. Why are these hedge fund special people any different? Didnt this whole mess kinda start with thier mistakes? How dare they take TARP funds and turn around and slap taxpayers in the face!

**Hypestyles** · April-30-09, 01:05 PM

i have a feeling that this is going to be longer than any 'surgical'/speedy' -bankruptcy talk implies-- look at Delphi..

the white house should not be timid in making demands on new priorities for chrysler and GM.. Really, I think that if Chrysler does survive, the government should force it to get on board with developing mass-transit systems [[next-gen buses, street-cars, rail systems) nationwide-- not to mention speeding-up development of alternative-fuel & electric cars.. if this doesn't happen now, then when?

**MoparDan** · April-30-09, 01:11 PM

This is a few GOP representatives[[McCotter & Camp) from up there criticizing Obama. Maybe they should've been lobbying their friends in the Senate like Corker, McConnell & Shelby. Oh yeah, that's right, they have "principles".

Mich. Republicans blast Obama's Chrysler plan
http://www.detnews.com/article/20090...-Chrysler-plan

**ndavies** · April-30-09, 02:36 PM

You can't run a car company if your suppliers decide all deliveries need to be COD.

http://www.detroitnews.com/article/2...-Heights-plant

**ndavies** · April-30-09, 02:38 PM

Originally Posted by Hypestyles

the white house should not be timid in making demands on new priorities for chrysler and GM.. Really, I think that if Chrysler does survive, the government should force it to get on board with developing mass-transit systems [[next-gen buses, street-cars, rail systems) nationwide-- not to mention speeding-up development of alternative-fuel & electric cars.. if this doesn't happen now, then when?

Yes, that's the solution. Let's saddle a bankrupt company with a bunch more unprofitable ventures.

lilpup · April-30-09, 02:42 PM

The Warren plants are shut down now, too, due to parts shortages

http://www.wxyz.com/news/story/Breaking-Several-Chrysler-Plants-Shut-Down/G5RCc3CXA0W7rlvSbgBrQQ.cspx

**CYNTHIA DUDAL** · April-30-09, 03:15 PM

AMERICA IS CLOSED PLEASE TRY YOUR CALL AGAIN!!
CHRYSLER IS CLOSED DURING BANK RUPSTY. WE WILL BE BACK THOUGH.

**CYNTHIA DUDAL** · April-30-09, 03:17 PM

One moment please

Originally Posted by cynthia dudal

america is closed please try your call again!!
chrysler is closed during bank rupsty. We will be back though.

**ndavies** · April-30-09, 03:17 PM

Looks like they are shutting most of their plants until they emerge from bankruptcy,

from: http://www.freep.com/article/2009043...for+bankruptcy

"But as part of the plan, Chrysler said most of its factories will shut down Monday, and will restart when the company emerges from bankruptcy. "

**Warrenite84** · April-30-09, 04:15 PM

The news we received internally says that employees will be on temporary layoff from Monday, May 4 for 30-60 days to settle out this restructuring. Agreements voted on by UAW members, will be honored including unemployment and sub pay for workers. Payments will be slightly less than regular pay, less taxes. Health insurance and Dental will remain.

Laid off skilled tradespersons who did not come from production will now be able to work in a production capacity in the local territory, [[50 miles radius), ONLY AFTER all laid off production workers get called back. It may take several years, but the opportunity is now there.

I will say the deal with the Government is lame, but in supporting it, we,[[the workers at Chrysler), live to fight another day. If the company is returned to profitability, the Sept., 2011 contract talks may roll back some of the unpalatable parts of this agreement.

**firstandten** · May-01-09, 01:10 AM

I feel bad for all of the stakeholders who came to the table and tried to work with Chrysler. The bond holders [[in reality hedge funds) caused this to happen.

In order to invest in hedge funds you need to be an accredited investor. To quality to be an accredited investor you must meet this criteria

1) earn an individual income of more than $200,000 per year, or a joint income of $300,000, in each of the last two years and expect to reasonably maintain the same level of income.

2) have a net worth exceeding $1 million, either individually or jointly with his or her spouse.

3) be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.

They wanted all of there money, they wouldn't budge so now every stakeholder will suffer. due to bankruptcy

Kudos to the government that wouldn't back down from the hedge funds owners

lilpup · May-01-09, 01:19 AM

Originally Posted by firstandten

I feel bad for all of the stakeholders who came to the table and tried to work with Chrysler. The bond holders [[in reality hedge funds) caused this to happen.

In order to invest in hedge funds you need to be an accredited investor. To quality to be an accredited investor you must meet this criteria

1) earn an individual income of more than $200,000 per year, or a joint income of $300,000, in each of the last two years and expect to reasonably maintain the same level of income.

2) have a net worth exceeding $1 million, either individually or jointly with his or her spouse.

3) be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.

They wanted all of there money, they wouldn't budge so now every stakeholder will suffer. due to bankruptcy

Kudos to the government that wouldn't back down from the hedge funds owners

I suspect the reality is they won't lose anything by the bankruptcy because they were hedged against it. They may have even benefited more with the bankruptcy than they would have had they taken the best offer.

MIRepublic · May-01-09, 01:30 AM

It's not a question of "may" but that they will make out better bring Chrysler to its knees. That is, unless the bankrupcty lands in the lap of a judge who doesn't treat the lords of finance as just that: lords, instead of equals to all other interests. Even filing in a more friendly Michigan isn't a reliable guard against powerful Big Finance interests.

lilpup · May-01-09, 02:27 AM

The bankruptcy filing was done in New York - Southern District.

Get this - Wall St. whining about fairness:

After weeks of increasingly rancorous negotiations, Perella Weinberg and 17 other financial firms — including OppenheimerFunds and Stairway Capital, a hedge fund that specializes in troubled companies — rejected the administration’s plan. It was, they argued, simply unfair.

http://www.nytimes.com/2009/05/01/bu...1hedge.html?hp

**Sstashmoo** · May-01-09, 08:35 AM

What is the Cerberus angle here?

The article mentioned they just turned Chrysler over to the government. Did they just take a huge hit, or will they profit somehow from it? Their original investment was five billion er so. They sure seem not to be squawking much. A bit puzzling.

**ndavies** · May-01-09, 09:12 AM

Cerberus took a huge hit. They would have lost even more from ongoing operations. They get to walk away without putting any more cash in and getting all Chrysler debts off their books.

The only play they have left is with GMAC. They will pick up the businees that would have been done by Chrysler financial.

**exdetroiter** · May-01-09, 09:48 AM

The hedge fund should have accepted the governments offer, outside of bankruptcy because while that offer was on the table, the attorneys whom were consulted [[actually retained at that time) had already prepared a Bankruptcy petition with the proposed percent to be paid back to the Hedge Fund. Surely its pennies on the dollar and will be approved by the bankruptcy judge as long as it allows Chrysler to erase debt and get rolling again. The economic state of America depends upon it.

**professorscott** · May-01-09, 10:15 AM

Reading between the lines of the newspaper accounts, it seems that Obama is hoping that in the bankruptcy proceeding the hedge funds and other recalcitrant investors are the ones who get it in the shorts. However, this judge has mucho experience handling these things and within the structure of bankruptcy law has an awful lot of discretion. So we'll see.

The big debate is "can this be done quickly or not", which shows a lack of understanding on the part of the reporters as to what is going on. Look for the following to occur, and kick me [[metaphorically) if I turn out to be wrong:

1. Chrysler will be split into two entities, which I'll call DeadCo and NewCo.

2. Fiat is purchasing a percentage of NewCo, which will also be owned by Uncle Sugar and the union's VEBA, and I think a couple other entities. This Fiat-NewCo combination will retain the rights to use the name "Chrysler", and we hope it will continue to make and sell automobiles. This part of the deal might be done fairly quickly, hopefully within the oft-noted "thirty to sixty days".

3. DeadCo remains to be disposed of. DeadCo consists of those parts of Chrysler that nobody plans to do anything with, such as certain plants. It has a "value" of $2.3 billion according to reports. DeadCo is going to drag on in the courts for years, but there will be very little press about it, because the only people who will really give half of a shit are those who will be receiving proceeds from the sale of the estate. In the end, I expect DeadCo will be an absolute jaw-dropping fucking bonanza for attorneys all over this great land, and a complete clusterbleep to everyone else involved. That $2.3 billion will turn out to be a vast overestimate; I'll be surprised if there's a billion in actual realizable cash.

So the answer to the question "will Chrysler come out of bankruptcy quickly" is: part of it probably will, and part of it certainly won't. But the important part [[to most of us) probably will.

If you are one of the unfortunate folks holding some kind of stake in DeadCo, all of us here at DY promise to buy you a drink when we next see you. That way at least you get a beer out of all this.