Chrysler Bankruptcy???

[Warrenite84]

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]

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]

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]

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]

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]

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]

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.

[jiminnm]

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.

When a company files bankruptcy, the value of the company is zero or less, and the owner[[s) essentially own nothing. The company effectively belongs to creditors and the bankruptcy procedure is theoretically designed to maximize amounts available to the creditors. In a chapter 11, that usually results in creditors receiving ownership in the reformed company and some asset sales or distribution.

As Prof points out, this case has a seasoned judge who oversaw the WorldCom and Enron bankruptcies.

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

Ndavies, in order for GMAC to become a bank and get TARP funds, Cerberus agreed to reduce their interest in GMAC to 30% or 40% [[forget which).