Article

2009-04-29 Economy

Obama Said to Plan for Chrysler "fallito", Alliance

April 29 (Bloomberg) -- President Barack Obama plans to announce tomorrow that Chrysler LLC will be placed into Chapter 11 bankruptcy, leading to an alliance with Italian automaker Fiat SpA, people involved in the matter said.

Administration officials are still resolving outstanding issues, and the plan is not finished yet, said one of the people, who declined to be named. Any bankruptcy filing could come as soon as tomorrow, people familiar with the matter said.

Chryslers best assets would be sold to a new entity that would have an ownership structure similar to that envisioned in an out-of-court deal between the Auburn Hills, Michigan-base automaker and Turin, Italy-based Fiat, the people said.

The Italian company would become a 20 percent owner of Chrysler, and a union retiree health-care trust fund would own 55 percent, with the rest of the company staying in the governments hands initially, people familiar with the matter said.

Chrysler has made progress in out-of-court restructuring, including reaching labor deals with the United Auto Workers union and Canadian Auto Workers on new contracts. Chrysler Chief Executive Officer Bob Nardelli said today in a memo to employees that the company is waiting to hear whether its 46 lenders will agree to take $2 billion in cash to wipe out $6.9 billion in secured debt.

Calls and e-mails to Chrysler spokeswomen, Lori McTavish and Shawn Morgan, seeking comment were not immediately returned.

Posted by GolfBravoUSMC 2009-04-29 17:42|| || Front Page|| [11135 views ] Top

#1 It can't be a Chapter 11 bankruptcy -- what happens to the people, such as bondholders and other creditors, who ordinarily have some standing? Bondholders ordinarily get ownership in a new company. What happens here?

We're rapidly becoming a nation of men, not laws.

Posted by Steve White 2009-04-29 18:00|| 2009-04-29 18:00|| Front Page Top

#2 Ummm, the phrasing "Will be placed into Bankruptcy" Indicates a forced bankruptcy by Obama Government Order. I see this as a very ominous thing.
Who's next on the forced bankruptcy list? certainly no Bailed out Banks (Who should be)

Posted by Redneck Jim">Redneck Jim 2009-04-29 18:03|| 2009-04-29 18:03|| Front Page Top

#3 Nonsense.

The article says the government is planning to put Chrysler into BK, not operate it by fiat, as opposed to by Fiat, which is ultimately likely. This seems to be proceeding in an orderly and legal, if unorthodox, fashion. If Bush had let Chrysler and GM go BK at the beginning, this problem would be resolved by now. Bernanke, Paulson and Bush will have a lot to answer for in the history books. As will Bambi. But not for this as it seems to be playing out OK.

Who's next is whoever borrows money from the government and can't repay it. Let the lesson be learned that when they say I've money from the government and I'm here to help, they speak with forked tongue. Again, something Bush, Paulson and Bernanke did that Barry is taking advantage of.

The bankers would be next if they had the nads to stand up to the government, but they've gone supine.

Posted by Nimble Spemble 2009-04-29 18:37|| 2009-04-29 18:37|| Front Page Top

#4 So the UAW will come to own 55% of Chrysler after all this clears. This seems neither orderly nor legal.

Posted by Anguper Hupomosing9418 2009-04-29 19:20|| 2009-04-29 19:20|| Front Page Top

#5 So will a Fiat Chrysler auto/truck then rust to nothing in 1 year like Fiat's do?

Posted by 3dc 2009-04-29 20:21|| 2009-04-29 20:21|| Front Page Top

#6 Is AmericanItalianLeyland.com still available?

Posted by Bright Pebbles the flatulent 2009-04-29 20:51|| 2009-04-29 20:51|| Front Page Top

#7 It's orderly and legal if all parties sign off. Every BK resolution involves sombebody getting crammed down. The parties get to decide if it's done acceptably. If the UAW thinks it will be better off iwth 55% of Chrysler, more power to it. And Fiat.

Posted by Nimble Spemble 2009-04-29 20:55|| 2009-04-29 20:55|| Front Page Top

#8 Still no word on how they plan to cut expenses and survive on their own. Instead it looks like Obama plans to create a whole class of corporate welfare mommas w/ taxpayers getting the shaft.

Posted by ed 2009-04-29 21:05|| 2009-04-29 21:05|| Front Page Top

#9 This time America has the right people in place to make socialism work unlike every other attempt universe wise.

/sarc.

Posted by Bright Pebbles the flatulent 2009-04-29 21:10|| 2009-04-29 21:10|| Front Page Top

#10 Obama to SAVE GM CHRYSLER??? > read, US ARMY, USMC, USDOD COMBAT FIGHTING VEHIIIKLES, sub-read MI ABRAMS MBTS, BRADLEYS, FMVS, ............@etc.

OTOH, RUSSIA > wants to "FIRE" 35,000 COMMISSIONED OFFICERS right now + 00,000's more later.

Posted by JosephMendiola 2009-04-29 22:33|| 2009-04-29 22:33|| Front Page Top

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