Chrysler’s Bankruptcy Update: $12.1 Billion Loss Edition
Chrysler’s Chrysalis Incomplete
Any American with a passing interest in business or the future of our country’s automakers has a stake in Chrysler’s success. Since its Chapter 11 bankruptcy April 30, Chrysler sold 20% of its assets to Italian automaker Fiat, 67% to United Auto Workers, and about 13% to both U.S. and Canadian governments. Their assets have lost $12.1 billion in the past three months. Speculators predicted that Italy’s devastated economy makes it an odd choice for an international merger, no matter how desperate Chrysler was: the majority of that $12.1 billion loss is traced to June, when the logistics of the bankruptcy sale saw some complications.
Part of that $12.1 billion debt is owed to the U.S. government, who covered 2 billion of Chrysler’s debt to the Old Carco (or Old Chrysler). Met with wide criticism for supposedly “writing a blank check” to car companies, the U.S. government bought part of Chrysler under the condition they would repay the $3.8 billion they lent to cover fiscal expenditures by June 30th.
“Old Chrysler’s” Chapter 11 bankruptcy hasn’t resulted in a full-on business chrysalis transformation, but they still have time. Their risky international merge doesn’t have everything to do with their financial problems, but it has potential to decimate the company. For advice on smart rebuilding after bankruptcy, look no further than the expertise offered by Legal Helpers. We offer a free initial consultation 6 days a week; call one of our attorneys today at 1-800-260-1402.
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