Chrysler files for Chapter 11
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Jim Press is the #1 Chrysler guy ON PAYROLL...and I sure hope he stays. He's been great since coming over from Toyota.
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Seems that FIAT having the majority stake is in the cards with government blessing...otherwise why mention it?
The bankruptcy is undoubtedly the decision of the government.
Otherwise why the offer as part of the filing, the U.S. government will provide up
to $3.5 billion in debtor-in-possession (DIP) financing and up to $4.5 billion in exit financing?
Last edited by 1fastdog; Apr 30, 2009 at 12:22 PM.
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I'm wondering if this won't actually help GM. Chrysler debt holders that held out for a better deal forced this. Now if they actually get less value back than what Chrysler had offered them, wouldn't the GM hold outs think twice before turning down a deal that would keep GM out of bankruptcy?
A stroke of genius on the part of those that are orchestrating all this. Do the rehearsal with Chrysler in preparation for the show with GM.
Now where's the "popcorn" smilie?
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From: FL/MI
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I don't know that I'd call it genius.
If the government wants the bond market to evaporate, such a move will certainly do it.
If the BK is a "kangaroo court" deal the "game" will certainly be on.
You have to be cautious not to win a battle in a fashion that loses the war.
I'm betting the Chinese are not Chrysler bond holders...
I don't think we would tell them to eat a 71% loss. Of course, I'm just guessing.
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I hope america and americans come out of this well.
GMAC is the go to finance company according to Obama, and I think he mentioned more taxpayer dough would be loaned to GMAC to facilitate.
What's Cerberus' stake in GMAC? You might want to check.
Maybe there's a punishment and maybe it's a percentage of a punishment.
If I were to make a wild guess, Cerberus is one of the holdout bond holders. We will see.
Last edited by 1fastdog; Apr 30, 2009 at 01:11 PM.
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I dug around and located this tidbit about the deal struck with the UAW and FIAT and the government:
"The UAW said its ratified agreement meets the U.S. Treasury requirements for continued government loans. Fiat also signed off on the agreement, which would give the UAW a 55 percent stake in the automaker and Fiat an eventual 35 percent stake."
I suppose it's not too hard to see that the offer to bondholders of nothing but cash at 29 cents on the dollar might get some resistance.
As far as I can tell, the UAW pensions and healthcare remain virtually intact.
I don't know what present stockholders receive.
It's amazing to me. This certainly qualifies as "change" in my opinion. It clears away any management and rank and file issues.
I hope the UAW runs it well. I can't tell where exactly the taxpayer, Cerberus, nor Daimler, nor present stockholders stand in the deal.
I think taxpayers foot the bill... and if it all goes bad they pay the pensions.
Let's hope it's run well.
"The UAW said its ratified agreement meets the U.S. Treasury requirements for continued government loans. Fiat also signed off on the agreement, which would give the UAW a 55 percent stake in the automaker and Fiat an eventual 35 percent stake."
I suppose it's not too hard to see that the offer to bondholders of nothing but cash at 29 cents on the dollar might get some resistance.
As far as I can tell, the UAW pensions and healthcare remain virtually intact.
I don't know what present stockholders receive.
It's amazing to me. This certainly qualifies as "change" in my opinion. It clears away any management and rank and file issues.
I hope the UAW runs it well. I can't tell where exactly the taxpayer, Cerberus, nor Daimler, nor present stockholders stand in the deal.
I think taxpayers foot the bill... and if it all goes bad they pay the pensions.
Let's hope it's run well.
Last edited by 1fastdog; Apr 30, 2009 at 01:09 PM.
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From: USA
I've spent the last half hour getting input on Chrysler's bankruptcy.
Seems that the bankruptcy is going to be used to flatten the small group of holdouts (3 investment hedge funds.... not a very popular group after those guys got massive federal bailouts themselves) that apparently demanded up to twice what everyone else was getting.
Seems that the bankruptcy is going to be used to flatten the small group of holdouts (3 investment hedge funds.... not a very popular group after those guys got massive federal bailouts themselves) that apparently demanded up to twice what everyone else was getting.
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From: City of Champions, MA, USA
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Hedge fund or not...they had secured loans,,meaning they were first in line to collect in a BK. This sets a dangerous precedent, and may make normal financing almost impossible for the big 3 for a long time. Also IMO, it makes no sense to bail out banks because they are writing down bad investments..and then tell them they have to take pennies on the dollar writing down Chrysler when they would have gotten first dibbs on everything in BK.
The risk of running private speculative investment off is a huge gamble.
Of course, if that's the plan, it's a good way to do it.
I just miss the wisdom.
We certainly live in interesting times.
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From: Ontario
Interesting that the bond ratings services have been downgrading the automakers for most of this decade, despite howls of protest from the CEOs. Well, look who was right in the end ...