Thursday, April 30, 2009

Official: Chrysler to enter bankruptcy

I know the Obama Administration will try to paint this as a "good thing", but who is going to buy anything from a company, especially a high ticket price tag as a car, when you don't know if the doors are going to close on you for good. Especially, if you need to take the car back for anything and what about your warranty on this vehicle? I said from the get, we are not going to be able to save EVERYONE. And let's not even start to think about the folks who are in retirement mode, I know they are very worried right now.

Chrysler will file for bankruptcy protection after talks with creditors aimed at reducing its huge debt burden failed, officials said on Thursday.

The No. 3 U.S. automaker faces a government deadline of 11:59 p.m. Thursday to have deals in place with labor, creditors and Italian automaker Fiat. Two of the three pieces appeared to be in place. A small group of debtholders were the remaining obstacle, as they hold out for a better deal from the U.S. government.

Talks between Chrysler LLC's lenders and the Treasury Department to reduce the automaker's secured debt and keep it out of bankruptcy protection broke down early this morning, a person familiar with the talks said.

President Barack Obama is scheduled to talk about the auto industry in remarks at 12 noon EDT.

Four banks with 70 percent of Chrysler's $6.9 billion debt had agreed to erase it for $2 billion, or less than 30 cents for each dollar held. That left Chrysler's fate in the hands of about 40 hedge funds with about 30 percent of the debt.

To entice the hedge funds into going along with the banks, the government on Wednesday afternoon added $250 million to the $2 billion that the banks had settled for and gave the hedge funds a 6 p.m. deadline to work it out, two people briefed on the talks said.


Home Page