Fort Lauderdale | West Palm Beach | Palm Beach Gardens
Chrysler Default on Loan in Bankruptcy 9/6/2009

According to Bloomberg.com, Chrysler LLC has defaulted on a loan that was due June 30  to the US Treasury.  The United States Government lent Chrysler in excess of 3.3 billions dollars as part of the financial recovery packages offered to the auto industry.  This loan was given to Chrysler to facilitate the completion of the bankruptcy case.  The US Treasury has filed a notice of default in the bankruptcy case pending before the United State Bankruptcy Court.  However, there appears to be alot more to this story.  Commentators have suggested that both Chrysler and the US Treasury knew that such a short repayment was nearly impossible and that the transaction was almost intended to fail.  This would leave remains of Chrysler essentially under the control of the US Government because the Treasury could demand repayment in full and prevent other creditors of Chrysler from obtaining repayment of any funds that are due.  The US Government already permitted the sale of the most valuable assets of Chrysler to Fiat.  Fiat now produces Chrysler vehicles as Chrylser Group LLC which is not a part of nor affected by these events.  The remains of the original Chrylser are now operating as  Old Carco LLC.  Creditors of the original Chrysler LLC have apparantly tried to block the sale of assets knowing that if the transactions were successful they could be left with large uncollectible debts.  This is a fascinating article about bankruptcy and the auto industry and shows how involved our government has been and remains in this recovery.  see  http://www.bloomberg.com/apps/news?pid=20601103&sid=aTGcdrIgTmvI

Site Design By:
CODANK Website Design, Web Development, and Internet Technologies