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U.S. Bankruptcy Judge Approves Chrysler’s First Day Motions in Federal Court

So far things are progressing smoothly, confounding critics.

by on May.04, 2009

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Tom LaSorda, Vice Chairman and President, left, announced his immediate retirement on the first day of the bankruptcy court proceedings.

Last Friday Judge Arthur Gonzalez in the U.S. Bankruptcy Court in New York City immediately approved a series of court filings from Chrysler LLC known as “first-day motions.” The orders issued by the court allow Chrysler to continue to operate its business during the reorganization proceedings. The quick action was expected, since the court is used to dealing with large, albeit less publicized, bankruptcies.

The Court granted approval for the company’s request to continue payment of wages and health and welfare benefits to employees and contractors, and continue its customer warranty programs.

However, the true test of whether a swift bankruptcy can occur in 30 to 60 days, as the Treasury Department claims, remains at an unknown date in the future. Still to be heard from are Chrysler’s debtors who object to the proposed $2 billion settlement on $6.9 billion in secured Chrysler debt. Even though the four largest banks holding 70% of this debt have agreed to the settlement, it is unknown how Judge Gonzalez will treat the issue. Other impediments to swift reemergence from bankruptcy remain, as hundred of motions from interested parties are expected.  

Subscribe to TheDetroitBureau.comStill, day one went smoothly from Chrysler’s point of view. Only one day before, Chrysler announced a restructuring plan that was agreed to by many of its stakeholders including the Obama Administration, now its largest creditor. The Chrysler agreement in principle to establish a global strategic alliance with Fiat SpA is the cornerstone of a new company. (more…)

High Noon as President Obama Shoots Down Hedge Funds and Speculators

President shoots to kill and explains where he stands on reviving the U.S. auto industry.

by on Apr.30, 2009

As to they implications of this shoot out on recalcitrant GM bondholders, well, I'll bet the President has already reloaded.

As to the implications of this shoot out on recalcitrant GM bondholders, well, I'll bet the President has already reloaded.

At eight minutes past noon today the President of the United States strode into the Grand Foyer of the White House to speak on the Chrysler restructuring.

It may as well have been the OK Corral by the time the President got done shooting down the outlaws that were holding up the restructuring of the wounded, but still breathing Chrysler Corporation.

He began simply enough by saying that his team would continue working with General Motors as its May 30 deadline approached, but quickly moved to the show down at hand.

“And today, after consulting with my Auto Task Force, I can report that the necessary steps have been taken to give one of America’s most storied automakers, Chrysler, a new lease on life,” he said.

“This is a company that has a particular claim on our American identity… Chrysler has not only been an icon of America’s auto industry and a source of pride for generations of American workers; it’s been responsible for helping build our middle class, giving countless Americans the chance to provide for their families, sending their kids to college, saving for a secure retirement.  It’s what hundreds of thousands of autoworkers and suppliers and dealers and their families rely on to pay their bills in communities across our industrial Midwest and across our country.” (more…)