Chrysler: Bankruptcy Plan Approved, Over by Month's End?

[nsap]

Chrysler: Bankruptcy Plan Approved, Over by Month's End?
GMI hears Chrysler's bankruptcy is looking up, might be over by the end of the month.
www.gminsidenews.com
May 6, 2009
By: Nsap

On April 30th, President Obama and his Auto Task Force (ATF) announced that thanks to four of Chrysler LLC's smaller secured bondholders, the company was going to be placed into Chapter 11 bankruptcy protection. The select few of creditors were the only stakeholders involved in the company that refused the plan set forth by Chrysler, Fiat and the United States government. During the bankruptcy announcement President Obama stated that this was going to be a "quick and surgical" bankruptcy process. Some speculated that it would not be quick at all, but it sounds like Obama kept his word. GMI is hearing that Chrysler's bankruptcy plan has been approved by the judge.

The select few (we've heard four) bondholders that were bucking at the plan are apparently hedge fund managers. Last week they announced, with a legal team intact, that they were going to challenge the Chrysler LLC bankruptcy plan. Their argument was that because all of the major creditors of Chrysler (JP Morgan, Citigroup, et al.) received TARP money from the US Government, they should be excluded from the approval process. GMI was told early this morning that the judge has thrown out their argument, ruling in favor of Chrysler and the US government. The bondholders putting the argument forward reportedly held less than 10% of Chrysler LLC debt.

With the "363" plan reportedly approved, the next step for Chrysler is the asset sale, which is part of the pre-packaged bankruptcy planed by the ATF. It is expected that the US government will make a bid for nearly all of Chrysler LLC's assets (close to $3 Billion we're told), which will form the new company that will emerge from bankruptcy. The name of the new company, as GMI reported last week, is supposedly Chrysler Acquisition Corporation.

Sources have also indicated that Chrysler could be out of bankruptcy protection by the end of this month! Keep in mind that the timing of reemergence is not set in stone, so that could change. At this time, however, it looks like Chrysler's bankruptcy is indeed "quick and surgical."

[Vmax2008]

"Sources"?

Like the Autonews story posted at 1am this morning? Or this "source"
http://news.bbc.co.uk/2/hi/business/8035239.stm

Sources are telling me that the stock market is up this morning!


anyways, good for Chrysler. It's about time they got a break.

[nsap]

Originally Posted by Vmax2008

"Sources"?

Like the Autonews story posted at 1am this morning? Or this "source"
http://news.bbc.co.uk/2/hi/business/8035239.stm

Sources are telling me that the stock market is up this morning!


anyways, good for Chrysler. It's about time they got a break.

GMI can't write their own articles? Where does it say "exclusive" on it? I don't read articles on subjects I write about because half the time they have wrong info in them, so yes, our sources were the source of the info in this.

[Vmax2008]

Originally Posted by nsap

GMI can't write their own articles? Where does it say "exclusive" on it? I don't read articles on subjects I write about because half the time they have wrong info in them, so yes, our sources were the source of the info in this.

Just teasing you. Sorry if it's lost the method of delivery. Anyways, as i said, good news for Chrysler. I still don't think they will survive in the long run!

[PAULSTS1]

This is Great News and shows what may be accomplished when Management takes the pro-active steps! This is one of the reasons I thanked Bob Nardelli in a recent post, Job Well Done!

[cincygoblue]

So these secured senior debt-holders (mostly pension funds and retirement accounts, NOT "speculators") get almost nothing, while the government, Fiat and UAW get all of the new company? Can the President and a non-Senate-confirmed task force simply dictate new bankruptcy terms? Did the Cerberus board approve the rerank of debt-holders as part of the loan-agreement, and what is legally required to be followed for holders of corporate bonds or these Chrysler bonds in specific? I hear a lot of rhetoric on both sides of this issue.

[LONGHORN]

Originally Posted by Vmax2008

Just teasing you. Sorry if it's lost the method of delivery. Anyways, as i said, good news for Chrysler. I still don't think they will survive in the long run!

You may be right if reports of the trucks being up for sale,Avenger, and Sebring gone along with other vehicles and Fiat having plans to bring over these vehicles.

http://www.autoblog.com/2009/05/05/c...-destined-for/

[mpsrent]

There is a black shadow that hangs over any company in bankruptcy proceedings. If this goes as fast as predicated, this can only mean good news for Chrysler, their employees, dealers, staff and customers.

[TruckMan]

From all accounts that I've been reading, the bond holders are being royally screwed by the governement in favor of the UAW. Imagine that, Obama favoring the UAW. He's already running for re-election!

And people wonder why the UAW wouldn't give any concessions. This is exactly why. Obama took 70% from the bond holders. And how much did the UAW walk away with? The UAW knew they had nothing to worry about. They're still sitting pretty.

What a joke.

[mbukukanyau]

The Bond market will never be the same, this is a case of Feds interfering with private party contracts.
Your corporate bonds will not be valued in the same way again...

[tamatt27]

Originally Posted by cincygoblue

So these secured senior debt-holders (mostly pension funds and retirement accounts, NOT "speculators") get almost nothing, while the government, Fiat and UAW get all of the new company? Can the President and a non-Senate-confirmed task force simply dictate new bankruptcy terms? Did the Cerberus board approve the rerank of debt-holders as part of the loan-agreement, and what is legally required to be followed for holders of corporate bonds or these Chrysler bonds in specific? I hear a lot of rhetoric on both sides of this issue.

This is what I'm wondering as well. Can we get some clarification on this issue please?

[member12]

Originally Posted by TruckMan

From all accounts that I've been reading, the bond holders are being royally screwed by the governement in favor of the UAW. Imagine that, Obama favoring the UAW. He's already running for re-election!

And people wonder why the UAW wouldn't give any concessions. This is exactly why. Obama took 70% from the bond holders. And how much did the UAW walk away with? The UAW knew they had nothing to worry about. They're still sitting pretty.

What a joke.

Ditto here.

No Chryslers in my future. Ever.

I am actually rooting for them to fail now because of their political problem. This is exactly why the Executive Branch should not have gotten involved. I feel the Chrysler situation has gotten way to political, and the government is showing their true colors here.


As a side effect, they've really screwed with the bond market in ways that it may never be the same.

But Obama has his votes so he can go on a screw up another car company next month.

[hunchman]

Originally Posted by TruckMan

From all accounts that I've been reading, the bond holders are being royally screwed by the governement in favor of the UAW. Imagine that, Obama favoring the UAW. He's already running for re-election!

And people wonder why the UAW wouldn't give any concessions. This is exactly why. Obama took 70% from the bond holders. And how much did the UAW walk away with? The UAW knew they had nothing to worry about. They're still sitting pretty.

What a joke.

Enough of the lemming UAW BS already......geez grow up and learn

[PhishPhood]

Originally Posted by cincygoblue

So these secured senior debt-holders (mostly pension funds and retirement accounts, NOT "speculators") get almost nothing, while the government, Fiat and UAW get all of the new company? Can the President and a non-Senate-confirmed task force simply dictate new bankruptcy terms? Did the Cerberus board approve the rerank of debt-holders as part of the loan-agreement, and what is legally required to be followed for holders of corporate bonds or these Chrysler bonds in specific? I hear a lot of rhetoric on both sides of this issue.

Again this is NOT true. These are NOT pension funds and retirement accounts. Pension funds and retirement accounts are prohibetted by statute or internal regulations from investing in anything as risky as Chrysler or GM. You have to get that idea out of your head. What these investors ARE is uber-uber-wealthy people with $Billions to burn, literally, where they've gotten most of their investments in rock solid investments that are growing - slowly. In order to diversify and to try to generate a quick couple of hundred million bucks they take a flyer on stupid crazy risky investments paying stupid crazy returns. It's no different than going to Vegas walking up to the craps table and yelling at the stickman 'HARD EIGHT for $50 million'.

Why multiple people keep thinking that these debt holder are 'senior' is beyond me. These debt holders hold nothing except an IOU. This is the wording of the notes that are held.

"IOU $500 million if I continue in business and if keep making my payments to you. However if I declare bankruptcy then you get nothing except the scraps of whatever is leftover."

Those are the only rights these guys have. How hard is that to understand?

[benroethig]

Originally Posted by LONGHORN

You may be right if reports of the trucks being up for sale,Avenger, and Sebring gone along with other vehicles and Fiat having plans to bring over these vehicles.

http://www.autoblog.com/2009/05/05/c...-destined-for/

Yeah, if those are only vehicles Fiat brings over the Pentastar is screwed. The 500 may sell on novelty, but the Grande Punto and Panda will make what they have now look like sales leaders. 85% of the car marker is buying Mid-size or compact sedans and I don't see plans for either.