Fox News reports Chrysler plans to file for Chapter 11 bankruptcy.
Chrysler plans to file for Chapter 11 bankruptcy, a White House official confirmed Thursday.
Chrysler faced a Thursday deadline to produce a restructuring plan, but the automaker’s creditors reportedly declined an offer Wednesday from the Treasury Department that would give the lenders $2.25 billion in exchange for forgiving Chrysler’s $6.9 billion debt.
The official, while criticizing Chrysler’s creditors for their actions in the negotiations, disputed reports that talks between them and the automaker broke down.
“Their failure to act in either their own economic interest or the national interest does not diminish the accomplishments made by Chrysler, Fiat and its stakeholders, nor will it impede the new opportunity Chrysler now has to restructure and emerge stronger going forward,” the official said.
About damned time.
But there are a few things about this story that creep me out.
First, why the hell is a White House official saying this and not Chrysler?
Second, WTF does “Their failure to act in either their own economic interest or the national interest” mean? Is that code language for they wouldn’t buy into more of Obama’s socialist fantasy world BS?
Later in the article was this gem:
As for General Motors Corp., its bondholders want a majority stake in the restructured automaker in exchange for forgiving their claim to $27 billion of the company’s debt. GM has come out with a plan that would give the U.S. government a 50 percent equity stake in exchange for about $10 billion in loan forgiveness.
The US government with 50% equity in GM. Apparently we’re gonna increase the fail because current levels of fail aren’t doing the job.
Don’t forget that the UAW will also have a significant share in GM after they restructure.
From Bloomberg:
“GM also said that existing equity holders, with 610.5 million shares outstanding, will own about 1 percent of the restructured company on a pro-forma basis, after about 60 billion more shares are issued. Bondholders would hold 10 percent of the new shares and the U.S. and the United Auto Workers union would divide the remaining 89 percent, the Detroit-based automaker said. ”
The new administration is going to turn this into a “worker’s paradise.” We’re boned.
Fortunately we have the Japanese car companies who still know how to run a business. We won’t have to be stuck buying “worker’s paradise” craptacular cars.
Nice blog. Keep up the good work.