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U.S. Is Said to Prepare Filing for Chrysler Bankruptcy
The New York Times ^ | April 23, 2009 | By MICHELINE MAYNARD and MICHAEL J. de la MERCED

Posted on 04/23/2009 12:48:06 PM PDT by MaestroLC

DETROIT — 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.

Moreover, Fiat of Italy would complete its alliance with Chrysler while the company is under bankruptcy protection.

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.

(Excerpt) Read more at nytimes.com ...


TOPICS: Breaking News; Business/Economy; Government; News/Current Events
KEYWORDS: automakers; bankruptcy; bhoeconomy; chrysler; detroit; economy; filing; uaw
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The accomplishments of Obama's first 100 days continue to mount...
1 posted on 04/23/2009 12:48:07 PM PDT by MaestroLC
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To: MaestroLC

Bush should have done this. How many billions down the drain?


2 posted on 04/23/2009 12:49:33 PM PDT by jalisco555 ("My 80% friend is not my 20% enemy" - Ronald Reagan)
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To: jalisco555

“Bush should have done this. How many billions down the drain?”

Have you read the plan? It’s not a bankruptcy - it’s a UAW bailout with a “bankruptcy” label. Taxpayers pay for the UAW health and pension benefits. It’s an outrage.


3 posted on 04/23/2009 12:52:01 PM PDT by MittFan08
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To: jalisco555

So now YOU the people can keep on paying the retirement benefits for overfed, underworked, overpaid auto makers in Detroit that rode their pony into the ground!


4 posted on 04/23/2009 12:52:16 PM PDT by rovenstinez
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To: MaestroLC

The seeds of Chrysler’s and GM’s bankruptcies were sown decades before Obama came into office, when labor liberals decided to make it damned near impossible for a company to say no to any demand from a labor union.


5 posted on 04/23/2009 12:52:19 PM PDT by Thane_Banquo (President George W. Bush, RINO-in-Chief.)
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To: MaestroLC
United Automobile Workers union, whose members’ pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing...

I wish my 401K would have been protected...Can you spare a bailout brother?
6 posted on 04/23/2009 12:52:26 PM PDT by TSgt (Extreme vitriol and rancorous replies served daily. - Mike W USAF)
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To: MaestroLC

Smells like a Sunday night filing.


7 posted on 04/23/2009 12:52:37 PM PDT by Petronski (For the next few years, Gethsemane will not be marginal. We will know that garden. -- Cdl. Stafford)
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To: jalisco555

The devil is in the details. What guarantees are they really given the UAW? Are they saving the UAW at the expense of the lenders?


8 posted on 04/23/2009 12:53:38 PM PDT by Oldexpat
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To: MittFan08

Yes it is an outrage, but if the autos go, we will pay for the pensions anyway just like the Airlines.


9 posted on 04/23/2009 12:53:52 PM PDT by nyconse (When you buy something, make an investment in your country. Buy Amrican or bye bye America)
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To: MittFan08
Have you read the plan? It’s not a bankruptcy - it’s a UAW bailout with a “bankruptcy” label. Taxpayers pay for the UAW health and pension benefits. It’s an outrage.

Which is why Bush should have done this. He should have forced a real Chapter 11, not this phony UAW bailout in disguise. The billions down the drain are in the future as well as the past. And if you think this is bad wait until GM files.

10 posted on 04/23/2009 12:53:58 PM PDT by jalisco555 ("My 80% friend is not my 20% enemy" - Ronald Reagan)
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To: MaestroLC
United Automobile Workers union, whose members’ pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing

Since when are conditions a part of Chapter 11?

11 posted on 04/23/2009 12:54:10 PM PDT by Dedbone
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To: jalisco555
I can't even imagine the uproar from Democrats if Bush would have done that. Not necessarily because it would have been right or wrong but because it was Bush.
12 posted on 04/23/2009 12:54:15 PM PDT by Russ (Repeal the 17th amendment)
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To: jalisco555
Bush should not have done this, or what he did.

The Treasury Department is preparing a Chapter 11 bankruptcy filing for Chrysler

Is appalling.

Treasury has an agreement in principle with the United Automobile Workers union

Who cares? It's Chrysler's business and Treasury should have no say in their bk decisions.

13 posted on 04/23/2009 12:54:19 PM PDT by D-fendr (Deus non alligatur sacramentis sed nos alligamur.)
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To: MaestroLC
HUH?
How in the world can the petitioner, in a BK filing, dictate terms?

The pensions are protected by the Pension Benefit Guarantee Corporation. Besides, Pensions liabilities are supposed to be funded in advance of need, FAR in advance of need, so I do not see the relevance here. It is just Obama trying to act like he is doing something.

On the health insurance issue? This is ridiculous! Why should GM continue to fund an expense that does NOTHING for the current competitiveness of GM?

14 posted on 04/23/2009 12:54:21 PM PDT by Kansas58
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To: MaestroLC
"United Automobile Workers union, whose members’ pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing"

I find this heinous.

Let them get 22¢ on the $ like the bondholders. They've been overcompensated and underworked for years. It will average out.

15 posted on 04/23/2009 12:54:47 PM PDT by ChicagahAl (Don't blame me. I voted for Sarah.)
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To: MikeWUSAF

They are sacrificing current workers though it appears. I don’t know how many more job losses we can absorb and still climb out of this mess.


16 posted on 04/23/2009 12:55:00 PM PDT by nyconse (When you buy something, make an investment in your country. Buy Amrican or bye bye America)
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To: MaestroLC

Has the Treasury Department previously been involved in the preparation of a Chapter 11 bankruptcy? I thought the Justice dept. would be the likely place to file.


17 posted on 04/23/2009 12:55:38 PM PDT by iopscusa (El Vaquero. (SC Lowcountry Cowboy))
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To: D-fendr

See my post number 10.


18 posted on 04/23/2009 12:55:56 PM PDT by jalisco555 ("My 80% friend is not my 20% enemy" - Ronald Reagan)
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To: MaestroLC

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


How about Chrysler itself, did 0 discuss this with them at all? Or better yet, have they discussed it with the American people who are going to keep the UAW and by extension, democrat votes, flush with cash?


19 posted on 04/23/2009 12:56:44 PM PDT by kenth (He won? No, he zero.)
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To: MaestroLC
"..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..."

That practically guarantees no private entity will be lending money to a reorganized Chrysler. The US is in the Car Business permanently if they want Chrysler to survive.

20 posted on 04/23/2009 12:56:55 PM PDT by Anti-Bubba182
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