It’s Official – Chrysler Proceeds With Chapter 11
Chrysler LLC is officially bankrupt – this according to Automotive news, which states that the American automaker will now be under the protective financial umbrella of Ch. 11 bankruptcy status, as it heads into final talks with Fiat for a merger both companies hope will stabilize CDJ. President Obama is expected to speak at Noon about this announcement.
UPDATES: 1) Chrysler LLC will idle most of its plants during its time in bankruptcy. The shutdown begins Monday and will stretch through the 30 to 60 days it is expected to take to restructure in Chapter 11 bankruptcy, the company said in a statement today. Chrysler has 12 assembly plants, including eight in the United States. It also owns and operates five North American engine plants, six stamping plants and seven transmission and parts plants. Chrysler has 26,000 UAW workers and 10,000 represented by the Canadian Auto Workers. Chrysler spokesman David Elshoff confirmed the plan. He said he would provide details as soon as he could today. The plant shutdown will further strain a supply base stressed by a 50 percent vehicle production cut in North America since the start of the year.
From Automovite News: WASHINGTON (Reuters) — Chrysler LLC will proceed with Chapter 11 bankruptcy protection now that talks with debt holders have broken down, an administration official said today. Chrysler also appears close to wrapping up its partnership agreement with Italian automaker Fiat S.p.A. by a U.S.-ordered midnight deadline.
President Barack Obama and the federal auto task force are scheduled to make a statement on the Chrysler reorganization today at noon.
Chrysler this morning still had not gained the bondholder support it needs to move forward with a restructuring and avoid the first-ever bankruptcy filing by a Detroit 3 automaker. Talks among those parties and the U.S. Treasury broke down overnight despite a sweetened Treasury offer.
An administration official with knowledge of the talks said the holdout creditors were provided a final opportunity to approve an increased offer of $2.25 billion in cash, up from $2 billion, in exchange for writing off all of Chrysler’s $6.9 billion in secured debt. They were given a deadline of 6 p.m. Wednesday.
This will not be easy. Tone of challenges face Chrysler in a Chapter 11
http://www.chapter11blog.com/chapter11/2009/04/chrysler-chapter-11-will-not-be-surgical.html