President Obama promised Chrysler ’s bankruptcy would be quick and surgical, and it looks as though the President might just keep to his word. The judge in the Chrysler case has reportedly sided with Chrysler and the U.S. government on a creditor dispute, essentially leaving the sale of Chrysler as the last major obstacle to overcome.
A group of lenders holding a 10 percent stake of Chrysler’s debt argued that Chrysler’s biggest lenders – namely JP Morgan and Citi Group – should not be involved in the approval process because they have received more than $90 billion from the government’s Troubled Asset Relief Program. However, according to GM Inside News, the presiding judge has thrown out that argument, siding with Chrysler and the U.S. government.
The next step of Chrysler ’s bankruptcy process involves selling the ‘good’ Chrysler to a new entity led by Italy’s Fiat. Because the sale of Chrysler was already included in the President’s pre-packaged bankruptcy plan for the automaker, Chrysler could emerge from bankruptcy as soon as the end of this month. However, the government will have to invest another $3 in Chrysler to get it out of Chapter 11 protection.
When Chrysler LLC finally does emerge from bankruptcy, it will likely be called the Chrysler Acquisition Corporation.
