Chrysler Gets Green Light for Federal Loans - Dodge Nitro Forum
Chrysler/Dodge/Jeep News Find out the latest scoop here!

LinkBack Thread Tools Display Modes
post #1 of 2 (permalink) Old 05-04-2009, 07:41 PM Thread Starter
Super Moderator
rickaren's Avatar
Join Date: Nov 2006
Location: Indiana
Posts: 22,736
Chrysler Gets Green Light for Federal Loans

Chrysler Gets Green Light for Federal Loans
Creditors Tried to Block Financing

Tuesday, May 5, 2009

NEW YORK, May 4 -- A U.S. bankruptcy judge Monday approved Chrysler's request to begin using $4.5 billion in government loans, a key step in the automaker's plan to emerge quickly as a stronger, global company.

Judge Arthur Gonzalez's ruling came at the end of a day-long hearing during which attorneys for some of Chrysler's lenders argued that he should deny the request for financing.

In documents filed in U.S. Bankruptcy Court in Manhattan, the lenders, who hold a portion of the $6.9 billion in senior loans to Chrysler, objected to the transfer of the automaker's assets to a new company run by Fiat of Italy, the United Auto Workers and the governments of Canada and the United States.

The lenders complain that the reorganization plan strips them of their property rights and that the proposed sales process has been tainted because it was dominated by the Treasury Department, which is taking "unconstitutional actions to help the United States address difficult economic times," they asserted.

"The Court should not permit a patently illegal sales process to go forward," the lenders' attorneys wrote in court papers.

The lenders, which include several hedge funds and other investment firms, were blamed by President Obama last week for preventing the government from reaching an out-of-court accord to reorganize Chrysler, the United States' third-largest automaker.

The group holds about 10 percent of Chrysler's secured debt. The government had offered about 33 cents on the dollar for their loans.

The rest of Chrysler's secured lenders, dominated by several large banks that have received government assistance in recent months, had supported the out-of-court deal, but it was not enough to keep Chrysler from filing for bankruptcy protection Thursday.

In a 300-page document filed Sunday night, lawyers representing Chrysler asked Gonzalez, a veteran judge who has overseen Enron and WorldCom cases, for a swift hearing that would allow it to reemerge as a new entity led by Fiat. Chrysler is asking for a hearing that would clear the way for a sale of assets to be held as soon as May 21.

However, a lawyer for some of the lenders, Tom Lauria, said he had not had "meaningful" time to review the documents and Gonzalez agreed to delay a decision until 2:30 p.m. Tuesday.

During the court proceedings, Lauria was pressed by Corinne Ball, the lead lawyer for Chrysler, to reveal who his clients were. Lauria told Gonzalez that he would do so, but would likely request the names be kept secret because some of his clients had received death threats. Local police and the FBI have been contacted, Lauria told Gonzalez.

Some of the lenders that have been publicly identified include OppenheimerFunds and Stairway Capital, a hedge fund based on Long Island.

Lauria represents creditors who call themselves the ad hoc committee of "non-TARP lenders," those who have not received funding from the Treasury's Troubled Assets Relief Program.

He indicated in the crowded courtroom that the group believed it would get more than what the government had offered in a liquidation. The group has argued that their interests were not represented in negotiations by big banks that have accepted TARP rescue funds from the government. They have said that they were willing to compromise but that the government's offer was unfair because it forced senior lenders to take bigger hits than other lenders, inconsistent with long-held rules established by law.

Among the slew of documents filed with the court Monday was a statement by Chrysler's bankruptcy adviser. Chrysler lost $16.8 billion last year and expects to lose $4.7 billion this year but believes it will be profitable by 2012, assuming the bankruptcy proceeding goes quickly, according to an income statement attached to that filing. The company said it is forecasting profits of about $100 million in 2012 and $1.6 billion in 2013.

The bankruptcy adviser, Robert Manzo, executive director of Capstone Advisory Group, said the senior secured lenders would recover about 9 to 38 percent of their claims.

Manzo also said in testimony in court Monday that the government's bankruptcy financing for Chrysler, known as a debtor-in-possession loan, was junior to the $6.9 billion in the senior secured loans owed to banks and other lenders and stood a "low likelihood" of being repaid. In court documents, Chrysler estimates it will need $4.1 billion for financing during bankruptcy, which it expects to last nine weeks. Some experts have questioned that timeline as overly rosy.

LINK:Chrysler Gets Green Light for Federal Loans -


Nitro Year: 2007 (1 of 91,815 sold in 07)
Nitro Model: R/T 4X4 Stone White
CAT-BACK Exhaust, CAI, Projector Head Lamps
Fully-Equipped w/all factory options
rickaren is offline  
Sponsored Links
post #2 of 2 (permalink) Old 05-05-2009, 10:59 AM Thread Starter
Super Moderator
rickaren's Avatar
Join Date: Nov 2006
Location: Indiana
Posts: 22,736
Message from Bob Nardelli

Message from Bob Nardelli

Posted Tuesday, May 5, 2009, 11:00 am in Employee News

Last modified on Tuesday, May 5, 2009, 10:48 am.

Dear Employees,

We received the positive news yesterday that the U.S. Bankruptcy Court gave interim approval to Chrysler for $4.1 billion of Debtor-In-Possession (DIP) financing, funded by the U.S. Treasury and Export Development Canada, and the use of $400 million of cash collateral, enabling the company to meet its working capital and general business needs going forward. Approval of Chryslerís DIP financing provides the company with resources to continue ďnormal courseĒ business operations pending approval of the sale transaction with Fiat. As courtroom developments occur in the coming days, we will continue to keep you informed.

In line with our restructuring plan, vehicle production at our U.S. manufacturing plants has been temporarily idled beginning this week. This action helps our dealers by enabling them to reduce their vehicle inventory and the financial pressure associated with their floorplan costs. Itís also an example of a business operation cost that is supported by DIP financing.

Iím sure that you are getting questions about our situation from friends, neighbors and family members. To help you answer questions and help your loved ones and acquaintances better understand what is happening, we have put together some factual points that you can find on the special restructuring section of The Scoop employee Web site at I also want to encourage those with Internet access to go to Client Home to get the details on all motions and documents that will be filed in court throughout our case.

Once again, thank you to all of our stakeholders who made concessions before we began the Chapter 11 proceedings. Because of these sacrifices, we are positioned well to go through court quickly and emerge stronger, with a renewed opportunity to build something truly special.



Nitro Year: 2007 (1 of 91,815 sold in 07)
Nitro Model: R/T 4X4 Stone White
CAT-BACK Exhaust, CAI, Projector Head Lamps
Fully-Equipped w/all factory options
rickaren is offline  
Sponsored Links

  Dodge Nitro Forum > Dodge Nitro News & Polls > Chrysler/Dodge/Jeep News

Quick Reply

Register Now

In order to be able to post messages on the Dodge Nitro Forum forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.

User Name:
Please enter a password for your user account. Note that passwords are case-sensitive.


Confirm Password:
Email Address
Please enter a valid email address for yourself.

Email Address:


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page
Display Modes
Linear Mode Linear Mode

Similar Threads
Thread Thread Starter Forum Replies Last Post
Chrysler Facts & History rickaren Chrysler/Dodge/Jeep News 109 06-04-2019 03:57 AM
Anniversary Edition Chrysler and Dodge Minivans rickaren Chrysler/Dodge/Jeep News 0 03-17-2009 08:08 AM
Chrysler Canada Submits Viability Plan rickaren Chrysler/Dodge/Jeep News 2 03-02-2009 06:23 PM
Picture Gallery: Chrysler 200C rickaren Chrysler/Dodge/Jeep News 1 01-13-2009 09:55 AM
Chrysler LLC Salutes Nearly 200 Dealers That Sold at Least 1,000 Units in 2007 rickaren Chrysler/Dodge/Jeep News 1 04-22-2008 06:25 PM

Posting Rules  
You may not post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On

For the best viewing experience please update your browser to Google Chrome