Chrysler pushed to brink - Despite deal with major banks, it may be forced into bankruptcy this week

[Bozita]

Source: Detroit News

Wednesday, April 29, 2009
Chrysler pushed to brink
Despite deal with major banks, it may be forced into bankruptcy this week
David Shepardson / The Detroit News


Washington -- Chrysler LLC could be forced to file for bankruptcy as early as this week, despite agreement by the automaker's major creditors to forgive much of its debt. The White House praised the agreement, but it pointedly wouldn't rule out bankruptcy. "There's still some ways to go in these negotiations. So I wouldn't rule anything in or out," White House spokesman Robert Gibbs said Tuesday.

Four principal banks that hold about 70 percent of the automaker's secured debt, including J.P. Morgan, Citibank, Goldman Sachs and Morgan Stanley, have agreed in principle to accept $2 billion in cash for $6.9 billion in secured debt, according to people familiar with the matter.

But they said some other banks -- there are 46 in all -- are resisting the deal.

"Without having all 46 banks, it would still be necessary for Chrysler to go through what we call our 'surgical bankruptcy' -- 30-day type of process -- in order to in effect drag along any banks that choose not to participate," said a person familiar with the matter.

Read more: http://www.detnews.com/article/20090429/AUTO01/904290373/Chrysler-pushed-to-brink

[blue_onyx]

1. I can't see all 46 banks making a deal

All it takes is one bank to forced Chrysler into bankruptcy so chances are it will happen. If Chrysler is forced into bankruptcy by a bank that our government bailed out, then I want that bank in bankruptcy too.

[Demeter]

2. Ditto!

We're all going to be in bankruptcy, at this rate. If they don't get moving in the right direction soon, they won't be able to move at all.

[high density]

3. Let's remember that Chrysler is a failed bet by Cerberus (private equity)

The sad part of course are the jobs that have been tangled up into all of this.

[Bozita]

4. The Detnews article was updated at 12:44pm EDT

[DJ13]

5. With a deal so close, why doesnt Obama extend the deadline?

Why the hard and fast deadline that looks to be just short of the stated goal?

[blue_onyx]

6. That kind of accommodation is usually reserved for Wall Street

This is the auto industry...they get "tough love." But who knows, maybe the deadline will be extended. We'll know soon.