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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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To: MortMan
Treasury - the GOSHDARN MOTHER-PUSS-BUCKET SUMNABATCH GOVERNMENT - is custom designing bankruptcy for a freaking company?!?

Of course not. They're doing it for a corrupt union.

41 posted on 04/23/2009 1:17:37 PM PDT by The Duke (I have met the enemy, and he is named 'Apathy'!)
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To: nyconse

Well that means the Unions Will get stiffed if they are relying on profits and stock value but, the article said that, “pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing”. How far is the government going to go to “Protect” the retirees? Are they going to write checks if Chrysler does not make a profit or the stock price stays in the toilet?


42 posted on 04/23/2009 1:21:14 PM PDT by Anti-Bubba182
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To: Anti-Bubba182

Well, let’s hope for success because then Chrysler would pay legacy costs to the union which is taking it over and not the taxpayer.


43 posted on 04/23/2009 1:22:09 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

Why are the Feds preparing the paperwork and not Chrysler? That is not their job!


44 posted on 04/23/2009 1:22:31 PM PDT by PhiKapMom ( BOOMER SOONER! Mary Fallin for OK Governor in 2010!)
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To: MaestroLC

We the tax payers pick up the tab.


45 posted on 04/23/2009 1:22:44 PM PDT by Jim Robinson
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To: MaestroLC

Since when does the Treasury department file banruptcy for a private company? This doesn’t smell right at all.


46 posted on 04/23/2009 1:23:15 PM PDT by kidd (Obama: The triumph of hope over evidence)
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To: MaestroLC

The next day, it will be open season on the UAW. They must not be allowed to persist.


47 posted on 04/23/2009 1:24:09 PM PDT by bert (K.E. N.P. +12 . Crucify ! Crucify ! Crucify him!!)
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To: Anti-Bubba182

Half of the costs will be given the UAW in the form of stock, the other half will be given to the UAW over a ten year period by Chrysler or more likely Fiat...if for some reason, the company could not meet the Legacy obligation, the government will guarantee it.


48 posted on 04/23/2009 1:24:45 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
Moreover, Fiat of Italy would complete its alliance with Chrysler while the company is under bankruptcy protection.

Yeah, sure. Why should they when they can walk away from the deal and then buy the pieces they want for basically nothing? Unless Obama can strong-arm them, which I doubt. More likely, he'll make them an offer they can't refuse - and the taxpayer will once again be expected to pay for his "great" ideas.

49 posted on 04/23/2009 1:24:55 PM PDT by Liberty1970 (Democrats are not in control. God is. And Thank God for that!)
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To: MortMan
Words fail me... Treasury - the GOSHDARN MOTHER-PUSS-BUCKET SUMNABATCH GOVERNMENT - is custom designing bankruptcy for a freaking company?!?


50 posted on 04/23/2009 1:26:03 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: MaestroLC

So UAW abuses a company until there’s nothing but a hollowed out husk, realize they’ve killed the milk cow, then cry to Obama who says “Not to worry, we’ll just savage the taxpayer now.” We’ve all been Gettelfingered.


51 posted on 04/23/2009 1:26:45 PM PDT by Paine in the Neck (Nepolean fries the idea powder)
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To: Liberty1970

Fiat is still in the deal...the reason for this is the bondholders have refused to budge...they get stiffed. Also, I don’t think the bondholder will get their credit default swap money this way either. Perhaps they will accept the government offer and this bankruptcy will be avoided.


52 posted on 04/23/2009 1:27:52 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: MaestroLC

Can the bondholders stop this? How do the unions come before the bondholders??


53 posted on 04/23/2009 1:27:59 PM PDT by TenthAmendmentChampion (Be prepared for tough times. FReepmail me to learn about our survival thread!)
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To: TurtleUp

yes. well done comrade


54 posted on 04/23/2009 1:29:22 PM PDT by paul51 (11 September 2001 - Never forget (July 4, 2009 see you there))
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To: nyconse
"...if for some reason, the company could not meet the Legacy obligation, the government will guarantee it."

There you go! The taxpayers are paying it. There is little chance of Stock prices or profits equal to the cost of the pensions and health care.

55 posted on 04/23/2009 1:30:29 PM PDT by Anti-Bubba182
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To: Jim Robinson

It’s just about time.....


56 posted on 04/23/2009 1:31:45 PM PDT by Lurker (The avalanche has begun. The pebbles no longer have a vote.)
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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..."]

We are being sheared like fat sheep.

57 posted on 04/23/2009 1:33:00 PM PDT by Mad_Tom_Rackham (What did Obama's Teleprompter know, and when did it know it...)
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To: Nachum

Have you seen this? Everyone’s saying this is another 0 accomplishment. The customized bankruptcy certainly is.


58 posted on 04/23/2009 1:33:52 PM PDT by TenthAmendmentChampion (Be prepared for tough times. FReepmail me to learn about our survival thread!)
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To: nyconse

The UAW is one of the biggest bondholders, and they didn’t budge either.

Wonder why.


59 posted on 04/23/2009 1:34:35 PM PDT by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: MikeWUSAF
I wish my 401K would have been protected...Can you spare a bailout brother?

Obviously you're not in one of the favored classes of the People's Republic of the US.

60 posted on 04/23/2009 1:34:41 PM PDT by happygrl (Hope and Change or Rope and Chains?)
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