Although Chrysler is still optimistic that Congress will hand down the $7 billion it needs to survive in the short term, the Michigan automaker hasn’t left itself without a ‘Plan B’. Chrysler reportedly used the international law firm Jones Day as a bankruptcy counsel earlier this year.
According to The Wall Street Journal, Chrysler met with Jones Day several weeks ago, presumably before the automaker went in front of Congress.
Chrysler , along with the rest of the Big Three, is in Washington D.C. this week asking for federal aid to the tune of $34 billion. Chrysler has requested $7 billion of that figure by January 1st, a total the automaker says it needs to survive.
If Congress decides to pass on the Detroit bailout, Chrysler would undoubtedly have to fall back on bankruptcy, a move that would like tailspin the Michigan automaker into Chapter 7 liquidation.
However, even it’s not completely out of the realm of possibilities for Chrysler to secure government funding and still wind up in Chapter 11 bankruptcy. One possible scenario from Capitol Hill would see Chrysler only landing a bridge loan if it agreed to a pre-packaged bankruptcy.
Whatever the case, the move shows that bankruptcy is a very real possibility for Chrysler.
