Obama Team Writes off $7 Billion Taxpayers Loaned Chrysler
Earlier this week, Senate Democrats quashed an attempt to amend a bankruptcy bill that would have given judges the power to reduce the principal on mortgages of distressed homeowners, swallowing an explanation from the banking industry that reducing the value of mortgages would make it harder for other Americans to get a loan.
Apparently, though, if you’re a car company formerly owned by a private equity firm — and soon to be taken over by a powerful union and an Italian automaker, there are different rules.
As part of the company’s bankruptcy filing, Chrysler LLC will not repay US taxpayers more than $7 billion it received as part of the company’s bailout earlier this year. Instead, the US will get an 8% ownership in a firm whose value continues to deteriorate by the day. >>>
The judge overseeing the bankruptcy of Chrysler has taken a significant step toward allowing the sale of the ailing US automaker to Italian rival Fiat.
Judge Arthur Gonzales rejected arguments from a group of Chrysler lenders, who wanted the deal blocked.
He said that the plan was a “fair and ordinary” process and stressed the “urgent need” for a sale.
The decision is seen as a victory both for Chrysler and for the US government, which has backed the plan.
Chrysler has asked for permission for a quick sale of most of its assets to a new company held by Italy’s Fiat , a United Auto Workers union healthcare trust and the US and Canadian governments. >>>
Italian carmaker Fiat has denied a report that it would cut 18,000 jobs and 10 assembly and component sites if it reached a deal with GM Europe.
Germany’s Frankfurter Allgemeine Zeitung newspaper said that the cuts would include both Vauxhall plants in the UK and two Fiat factories in Italy.
It cited an internal Fiat strategy plan dated 3 April.
In response, Fiat said the information was not generated by Fiat and did not form part of any plan prepared by Fiat. >>>