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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: MittFan08
Taxpayers pay for the UAW health and pension benefits. It’s an outrage.

Not only that but the bond holder probably have insurance for default. The default will probably put someone who is too big to fail under and the treasury will bail them out too.

81 posted on 04/23/2009 1:51:54 PM PDT by staytrue
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To: MaestroLC

Shouldn’t it be CHRYSLER who decides to file bankruptcy?


82 posted on 04/23/2009 1:52:03 PM PDT by Blood of Tyrants (Socialism is the belief that most people are better off if everyone was equally poor and miserable.)
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To: swarthyguy

Yeah, bribes are where it’s at for sure.


83 posted on 04/23/2009 1:52:36 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: nyconse

“How can you take retired people and pull the rug out from under them?”

That’s a liberal stance if I’ve ever seen one.

That’s like saying “How can you take employed people and lay them off?”

It happens and it happens to a lot of people, especially now.

People that paid into their 401Ks aren’t getting any assistance for their losses.


84 posted on 04/23/2009 1:53:05 PM PDT by JenB987
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To: Blood of Tyrants

Many companies are forced into bankruptcy and don’t go willingly. Chrysler is being forced into bankruptcy.


85 posted on 04/23/2009 1:53:28 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

Filing for bankruptcy should get rid of that UAW albatross! Leave it to the completely unethical Demonrats to fudge that one.


86 posted on 04/23/2009 1:55:20 PM PDT by RoadTest (" -strait is the gate, and narrow is the way, which leadeth unto life, and few there be that find it)
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To: JenB987

Again, the hypocrisy is stunning...the little guy can have his entire world destroyed after a lifetime of work, but God forbid an AIG exec is denied his bonus at taxpayer expense. You know there is contract and pension law involved here. But of course only bank and AIG contracts have any validity (sarcasm).


87 posted on 04/23/2009 1:55:32 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: JenB987

A pension is not a 401K...there are laws you know and contracts.


88 posted on 04/23/2009 1:56:38 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: bert
Politically possible? Maybe for the Obama adiministrtion, but GM is already talking about leaving the country, let alone the state of Michigan. Why should the tax payor have to prop up a union pension?

Michigan was going down anyway. No amount of govt. money is going to save it. People used to move to Detroit to make the cars. Now they are just going to have to leave it. These companies cannot continue to lose the kind of money the have been and continue forever. Therefore, I don't accept your premise or conclusion. It is this kind of thinking that has prolonged the inevitable.

89 posted on 04/23/2009 1:56:59 PM PDT by Nachum (the complete list at www.nachumlist.com)
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To: nyconse

!. Yes Michigan is not alone but the density of UAW retirees from the auto companies and vendors is far greater as a 5 of total.

2. There will be no deal or restructuring until the UAW retiree problem is removed from the companies in whole or in major part. The government and the UAW must submit to the burden. If they don’t they lose all.


90 posted on 04/23/2009 1:58:18 PM PDT by bert (K.E. N.P. +12 . Crucify ! Crucify ! Crucify him!!)
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To: nyconse

Nothing personal....but you union folks need to drain every penny you have and then go to your kids and take all their money and then invest in GM. Then you have a stake!

BTW..I was forced into a union a time or two and it became apparent that they only protected the weak and union leadership didn’t have the brains to pour urine out of a boot with the instructions on the heel! They were however quite good and living fat off the labors of others.


91 posted on 04/23/2009 2:02:14 PM PDT by RVN Airplane Driver ("To be born into freedom is an accident; to die in freedom is an obligation..)
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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....”

These bastards are running this country into the ground, while they protect the unions...WITH MY FREAKIN’ MONEY! F*CKING SOCIALSTS!!!

I lost my job for 6 months and I don’t recall Uncle Sugar bailing MY ASS out....

Wake up, Republican politicians. Your ass is also in a sling.

TIME TO REVOLT IS NOW! Bring it on Janet!

BTW, why is every Janet in a Democrat cabinet a flaming loon?


92 posted on 04/23/2009 2:02:44 PM PDT by gathersnomoss (General George Patton had it right.)
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To: nyconse

Didn’t Delphi retirees hire that west coast firm that helped Delta win on health care?
Be curious to see where the Treasury Dept./Chrysler files. I saw an article in Detroit Free Press earlier (can’t find now: `Who controls the past controls the future’?) where Michigan officials want it filed in Detroit.


93 posted on 04/23/2009 2:03:20 PM PDT by tumblindice (Oranges and lemons say the bells of St. Clemons)
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To: Nachum

.....It is this kind of thinking that has prolonged the inevitable. .....

It is not as if the problem suddenly arose. It has been well understood for years. It is not a business or economic problem. It is now a political problem to which there is no really good solution. The party that won took on the problem and is now being forced to develop a solution.

Michigan, Indiana, and probably Ohio are at economic stake and there fore political stake. If the UAW is not bailed out, the resulting state death will kill the leftists forever. They will not let it happen.


94 posted on 04/23/2009 2:04:18 PM PDT by bert (K.E. N.P. +12 . Crucify ! Crucify ! Crucify him!!)
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To: nyconse; swarthyguy

There is a lot of anger at the UAW at its support of this idiot Pres__ent. It’s spilling over with all the bailout money given to GM and Chrysler. Honestly we will have to pay out money to the pensioners one way or another - bailout, welfare, settlement, insurance bailout, whatever.

I hope we aren’t getting used to the idea of such heavy handed interference and now we’re just arguing over how much is the right amount.

It appalled me that the Treasury is involved. Why isn’t Chrysler figuring this out for themselves, and the union’s lawyers go to court and fight for their share.

Gov’t always messes things up.


95 posted on 04/23/2009 2:08:19 PM PDT by TenthAmendmentChampion (Be prepared for tough times. FReepmail me to learn about our survival thread!)
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To: MittFan08

Fiat should run away from Chrysler.


96 posted on 04/23/2009 2:10:28 PM PDT by Frantzie (Bumper Sticker idea: "Remember when Bush was President & Americans had jobs?")
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To: MaestroLC

Why is the government preparing the bankruptcy and not the company? The interests aren’t the same even though the government did give them $. Is the treasury going to prepare it and hand it to the company and order them to sign here? That would seem to put the company under duress which has interesting ramifications in contract law. The duress argument is especially strong considering the governments power and their ability and demonstrated willingness by this administration to raise the mob to get their way (to the banks we’re the only thing between you and the pitchforks for example. The message of that statement was do what we want or we’ll set the mob on you.)


97 posted on 04/23/2009 2:11:44 PM PDT by airedale ( XZ)
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To: TenthAmendmentChampion

>> we aren’t getting used to the idea of such heavy handed interference

Not getting used, but actively welcoming and demanding it.

MA is getting to hike taxes bigtime, and there is no furor over it.

America is fearful and looking to govt for help.

Bush shoulda never signed TARP. The precedent was set and is now snowballing into every aspect of life.


98 posted on 04/23/2009 2:12:13 PM PDT by swarthyguy ("We may be crazy in Pakistan, but not completely out of our minds," ISI Gen. Ahmed Shujaa Pasha)
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To: nyconse; JenB987

I’m no fan of unions however I never cease to be amazed by FReepers who support upholding executive contracts under capitalism but would do anything to see union contracts nullified. These are the same folks who decry class warfare yet engage in it themselves.

Most UAW contracts were bloated welfare programs however they are no less valid than the egregious compensation packages that were agreed to for corporate executives.

The unions and management killed the golden goose and taxpayers are bailing out both of them.


99 posted on 04/23/2009 2:14:54 PM PDT by TSgt (Extreme vitriol and rancorous replies served daily. - Mike W USAF)
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To: swarthyguy

There’s three varieties of “we”:

* We Americans...
* We conservatives
* We conservatives on FR

Hopefully the last group or the last two groups aren’t sinking to that level. You’re right, the main part of the country is demanding gov’t help.

See this for the ultimate irony, written for GM:

http://mises.org/books/TRTS/


100 posted on 04/23/2009 2:17:44 PM PDT by TenthAmendmentChampion (Be prepared for tough times. FReepmail me to learn about our survival thread!)
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