According to this report by Bloomberg, Chrysler will submit a motion to sell many of its assets to a new entity controlled by the UAW, the Treasury and FIAT. Rather than speculate on what the terms and conditions will be, take note of what the Treasury is doing to force the quick sale.
The Treasury is providing up to $8 billion of DIP financing to Chrysler. Reading between the lines, it appears that the Treasury has made a sale to an entity that has an alliance with FIAT is a requirement of its loan to Chrysler. The Treasury also appears to be requiring the sale to occur within 60 days. I wonder if the financing proposal gives the Treasury the option to pull the plug on the financing if the sale isn't completed in this time frame.
There should be some fireworks in Federal bankruptcy court. Corinne Ball of Jones Day, is Chrysler's lead bankruptcy attorney. She is a formidable force and quite capable of accomplishing the company's and the Treasury's objectives. Rest assured, the courtroom will be standing room only.
Cheers, Mike
Monday, May 4, 2009
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