Chrysler Loans forgiven

[sactoking]

Story

NEW YORK (CNNMoney.com) -- Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.

This revelation was buried within Chrysler's bankruptcy filings last week and confirmed by the Obama administration Tuesday. The filings included a list of business assumptions from one of the company's key financial advisors in the bankruptcy case.

Some of the main assumptions listed by Robert Manzo of Capstone Advisory Group were that the Treasury would forgive a $4 billion bridge loan given to Chrysler in the closing days of the Bush administration, a $300 million fee on that loan, and the $3.2 billion in financing approved last week by the Obama administration to fund Chrysler's operations during bankruptcy.

An Obama administration official confirmed Tuesday that Chrysler won't be repaying the loans, though a portion of the bridge loan may be recovered by Treasury from the assets of Chrysler Financial, the former credit arm of the automaker which is essentially going out of business as part of the reorganization.

"The reality now is that the face value [of the $4 billion bridge loan] will be written off in the bankruptcy process," said the official, who added that the 8% equity stake that Treasury will be receiving as part of the company's reorganization is meant to compensate taxpayers for the lost money.

"While we do not expect a recovery of these funds, we are comfortable that in the totality of the arrangement, the Treasury and the American taxpayer are being fairly compensated," said the official.

The company filed for bankruptcy Thursday as part of a deal with the federal government, unions, some lenders and Italian automaker Fiat to keep the company from being shut down.

The Canadian government also agreed to kick in about $900 million in bankruptcy financing. According to the filings, Chrysler's advisor assumes that this loan will be forgiven as well.

The Obama administration official said that other money being made available to Chrysler, such as the $4.7 billion that will go to the company as it exits bankruptcy, will be a loan that the government expects to be paid back. In addition, that loan will be secured by company assets, unlike the previous loans to Chrysler.

According to the filing, the company's financial advisor also foresees the need for an additional $1.5 billion loan from the Treasury Department by June 30, 2010.

Lori McTavish, a spokeswoman for Chrysler, said some of the assumptions made by the company have changed since its bankruptcy filing on April 30. But she could not say specifically if the company still hoped for the additional federal loan in 2010.

"The content of the document needs to speak for itself. We are simply not in a position to comment," she said.

Seriously?!? $7.2 billion gone up in smoke. $900 million Canadian gone. And we're looking to give them an additional $6.2 billion? WHEN WILL WASHINGTON LEARN?

What happened to the American people making money off of these bailouts? What are we getting? An 8% stake in Chrysler. For $7.2 billion, we get 8%. That's a fair deal? Only if Chrysler is worth $90,000,000,000 which it isn't.

What's to say that our other $6.2 billion won't go up in smoke? Is the fact that those loans are collateralized supposed to make us feel better? How do we know that we're not in second or third positions on those assets? It's still possible for us to get NOTHING, even on a collateralized obligation.

Seriously, the government (D and R alike) is bending over and taking it in the pooper on these bailouts. This is one more piece of the "American politicians are the stupidest, greediest, most corrupt people on the planet" puzzle (except for maybe the UN).

 

[OCGuy]

Thank you Bush for starting it, thank you Obama for continuing it.

We almost need a serious depression to stop this nonsense and start over.

 

[MikeMike]

cuz 7B is such a large amount... its a frickin drop in the bucket...

also, IF the merger of Chrysler/FIAT does NOT work, Chrysler will owe FIAT $35Million...

 

[compuwiz1]

So, in other words, it was a true bailout? :shocked:

 

[Saga]

I really wish some of this government spending would finally go to the people directly and not through proxy.

 

[waggy]

well duh? you guys sound suprised it was wasted. same iwht the "bailouts" for the financial district.

 

[fskimospy]

Originally posted by: Saga
I really wish some of this government spending would finally go to the people directly and not through proxy.

You want direct democracy? That's an awful idea. There's a reason why no country on earth does it that way.

 

[glenn1]

Originally posted by: sactoking
Story

NEW YORK (CNNMoney.com) -- Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.

This revelation was buried within Chrysler's bankruptcy filings last week and confirmed by the Obama administration Tuesday. The filings included a list of business assumptions from one of the company's key financial advisors in the bankruptcy case.

Some of the main assumptions listed by Robert Manzo of Capstone Advisory Group were that the Treasury would forgive a $4 billion bridge loan given to Chrysler in the closing days of the Bush administration, a $300 million fee on that loan, and the $3.2 billion in financing approved last week by the Obama administration to fund Chrysler's operations during bankruptcy.

An Obama administration official confirmed Tuesday that Chrysler won't be repaying the loans, though a portion of the bridge loan may be recovered by Treasury from the assets of Chrysler Financial, the former credit arm of the automaker which is essentially going out of business as part of the reorganization.

"The reality now is that the face value [of the $4 billion bridge loan] will be written off in the bankruptcy process," said the official, who added that the 8% equity stake that Treasury will be receiving as part of the company's reorganization is meant to compensate taxpayers for the lost money.

"While we do not expect a recovery of these funds, we are comfortable that in the totality of the arrangement, the Treasury and the American taxpayer are being fairly compensated," said the official.

The company filed for bankruptcy Thursday as part of a deal with the federal government, unions, some lenders and Italian automaker Fiat to keep the company from being shut down.

The Canadian government also agreed to kick in about $900 million in bankruptcy financing. According to the filings, Chrysler's advisor assumes that this loan will be forgiven as well.

The Obama administration official said that other money being made available to Chrysler, such as the $4.7 billion that will go to the company as it exits bankruptcy, will be a loan that the government expects to be paid back. In addition, that loan will be secured by company assets, unlike the previous loans to Chrysler.

According to the filing, the company's financial advisor also foresees the need for an additional $1.5 billion loan from the Treasury Department by June 30, 2010.

Lori McTavish, a spokeswoman for Chrysler, said some of the assumptions made by the company have changed since its bankruptcy filing on April 30. But she could not say specifically if the company still hoped for the additional federal loan in 2010.

"The content of the document needs to speak for itself. We are simply not in a position to comment," she said.

Seriously?!? $7.2 billion gone up in smoke. $900 million Canadian gone. And we're looking to give them an additional $6.2 billion? WHEN WILL WASHINGTON LEARN?

What happened to the American people making money off of these bailouts? What are we getting? An 8% stake in Chrysler. For $7.2 billion, we get 8%. That's a fair deal? Only if Chrysler is worth $90,000,000,000 which it isn't.

What's to say that our other $6.2 billion won't go up in smoke? Is the fact that those loans are collateralized supposed to make us feel better? How do we know that we're not in second or third positions on those assets? It's still possible for us to get NOTHING, even on a collateralized obligation.

Seriously, the government (D and R alike) is bending over and taking it in the pooper on these bailouts. This is one more piece of the "American politicians are the stupidest, greediest, most corrupt people on the planet" puzzle (except for maybe the UN).

This isn't about the money, it's about control. The left has long had a fantasy that they'd be able to control what kinds of cars get made and that Americans can buy. The Obama admininstration has come out and admitted it directly.

Last month, Jackson declared that her agency would regulate a number of greenhouse gases, including carbon dioxide. Since cars and trucks are among the largest sources of that newly declared pollutant, Jackson's views regarding the industry suddenly have great relevance.

Here is what the nation's new Queen of Cars told National Public Radio last week, just before Chrysler teetered into bankruptcy:

"The president has said, and I couldn't agree more, that what this country needs is one single national road map that tells automakers that are trying to become solvent again what kind of car it is that they need to be designing and building for the American people."

Even her NPR interviewer felt compelled to ask if designing road maps for critical industries really should be a role of the federal government. "That doesn't sound like free enterprise," said NPR's Michele Norris.

Jackson responded, in part, that it was "free enterprise" that got the country into the economic mess it's in now.

 

[ericlp]

Originally posted by: MIKEMIKE
cuz 7B is such a large amount... its a frickin drop in the bucket...

also, IF the merger of Chrysler/FIAT does NOT work, Chrysler will owe FIAT $35Million...

Drop in the bucket? Yeah, so...

But why the double standard? If a bank loans you some money for your start up? Well, you can't pay it back? That start liquidating everything it can including your stuff. You own a few yhats and mc-mansions... well, Poof there it goes! Not to mention late payment fees and interest on all that shit!

The same goes for banks. Any of us walk into the bank and get a personal loan and try not paying that back and see what happens tho!!! We have dished out over a Trillion to the banking system and guess what?? I doubt they will pay it back to and we won't even charge them a late payment fee or interest! WTF!!!!!!!!! Why does the little guy gotta jump through 50 billion hoops then get grilled when he misses one payment. Yet these large companies don't have to do jack shit and they are forgiven to the tune of "DON'T WORRY ABOUT IT!!! YOU DON'T HAVE TO PAY US BACK!"

BS!

 

[Budmantom]

Obama calls this stimulus.

 

[Slew Foot]

Duh.

Told you so.

Meet the new king, same as the old one.


Hope and change.

Etc..

 

[StageLeft]

Well, this was extremely easy to call, and we did call it, last year when they got the money. It was never going to be repaid. Ever never.

 

[Thump553]

Originally posted by: glenn1
This isn't about the money, it's about control. The left has long had a fantasy that they'd be able to control what kinds of cars get made and that Americans can buy. The Obama admininstration has come out and admitted it directly.

Last month, Jackson declared that her agency would regulate a number of greenhouse gases, including carbon dioxide. Since cars and trucks are among the largest sources of that newly declared pollutant, Jackson's views regarding the industry suddenly have great relevance.

Here is what the nation's new Queen of Cars told National Public Radio last week, just before Chrysler teetered into bankruptcy:

"The president has said, and I couldn't agree more, that what this country needs is one single national road map that tells automakers that are trying to become solvent again what kind of car it is that they need to be designing and building for the American people."

Even her NPR interviewer felt compelled to ask if designing road maps for critical industries really should be a role of the federal government. "That doesn't sound like free enterprise," said NPR's Michele Norris.

Jackson responded, in part, that it was "free enterprise" that got the country into the economic mess it's in now.

The "proof" you cite is an editorial and doesn't support the premise that "the left" wants to control what kind of cars get made and that Americans can buy.

First of all, your editorial writer mischaracterizes the head of the EPA as the nation's Queen of Cars, which is a fictional delusion.

Secondly, your editiorial writer omits (almost certainly on purpose) the question the EPA was answering in the NPR interview, thus greatly distorting the context of her answer. That question was should the nation have one uniform car pollution standard or multiple ones, as under the current system (the California rules-also adopted by a substantial number of other states and the so-called national standard). Ms. Jackson made it clear she hadn't made a decision yet, but she was inclined to simplify the system by having one national standard modeled after the more stringent California rules. One standard, she felt, would make it simplier for the car manufacturers to comply. Hardly something to build a so-called leftist conspiracy to take over auto manufacturing upon.

 

[miketheidiot]

7 billion was worth not having chrysler go bankrupt 6 months ago.

 

[palehorse]

This has been a given since the very first "bailout" rolled off the previous Admin's printing press.

 

[waggy]

Originally posted by: miketheidiot
7 billion was worth not having chrysler go bankrupt 6 months ago.

how so? personally that sounds like a load of bullshit.

 

[MotF Bane]

Originally posted by: miketheidiot
7 billion was worth not having chrysler go bankrupt 6 months ago.

:disgust:

 

[CPA]

Hey didn't you read the other thread? There's more important things to worry about than taxes and the risks and rewards of capitalism according to the obama apologists.

 

[reallyscrued]

Originally posted by: eskimospy

Originally posted by: Saga
I really wish some of this government spending would finally go to the people directly and not through proxy.

You want direct democracy? That's an awful idea. There's a reason why no country on earth does it that way.

Yeah...cuz as soon as a group of people are given power, they are reluctant to give it up.

 

[GuitarDaddy]

Great sensationalism reporting there OP, you post as if the loans are already forgiven just because some analysts working for the bankruptee is baseing there projections on it

We are in the talk smack stage of the proceedings which don't indicate much at all about the final judgment and many people expect that the actual outcome of the proceedings will be much different than you report.

 

[Firebot]

LOLCapitalism.

The funniest part of this whole debacle is how the Republican sheep are acting as if this is somehow shocking news and how Obama is the cause of this when there was more money being forgiven which came from the Bush era. This would have happened regardless of who was president or what party was in power, the only thing of note was when it would happen.

Republicans and Democrats are the same, the only thing being different is the color the sheep painted their tinfoil hat to ward off the other side.

 

[miketheidiot]

Originally posted by: MotF Bane

Originally posted by: miketheidiot
7 billion was worth not having chrysler go bankrupt 6 months ago.

:disgust:

if you look bad at the original thread from back that , i said precisely that. Having GM or chrysler go bankrupt 6 months ago would have been catastrophic, now, not so much.

 

[JS80]

lulz lender group giving obama the finger

 

[cubby1223]

Originally posted by: sactoking
Seriously?!? $7.2 billion gone up in smoke. $900 million Canadian gone. And we're looking to give them an additional $6.2 billion? WHEN WILL WASHINGTON LEARN?

LEARN WHAT?!! This is what they do.

Obama secured $7.2 billion to the UAW which will in turn fund Democratic election campaigns for many election cycles to come.

 

[ProfJohn]

$7.7 billion to provide 58,000 people with jobs for 6 months???

Maybe we should have closed the company and just sent each employee a check. Might have been cheaper in the long run.