What will happen with the Chrysler/Fiat Merger?

[crowe]

Best news yet, but I don’t like the “but the automaker is still expected to be restructured in a bankruptcy”
As for Cerberus, bet they keep CF & some real estate.

[scooter]

Will Cerebus still be part of Chrysler Financial???? and they still own the HQ building in Aubrun HIlls.....so they won't be active members, just in the shadows????

[XDCX]

Originally Posted by crowe

Best news yet, but I don’t like the “but the automaker is still expected to be restructured in a bankruptcy”
As for Cerberus, bet they keep CF & some real estate.

I've heard that bankruptcy is still a possibility, but I don't recall reading anything that said that it's "expected." (It's possible I missed the quote - I've been reading a lot of different sources this morning.)

I'd hate to think that Chrysler has come this far and they still have to deal with all the uncertainty that bankruptcy brings.

[XDCX]

Originally Posted by scooter

Will Cerebus still be part of Chrysler Financial???? and they still own the HQ building in Aubrun HIlls.....so they won't be active members, just in the shadows????

Concerning CF and Cerberus, that's a great question. Based on what I read a week or so ago I know that Cerberus was trying to merge CF and GMAC and maintain control of the new company. This was seen as an effort to salvage their investment in Chrysler.

Based on today's news reports the Treasury is trying to force a merger of CF and GMAC and there's no mention of Cerberus. I find it hard to believe that Cerberus would walk away from their 80.1% equity and their loans to Chrysler without getting anything. Who knows?

Concerning Auburn Hills, I've read that Cerberus owns Chrysler's Head Quarters and leases it back to Chrysler. That said, I don't think the WHQ building was part of their initial deal with Daimler, I think Cerberus purchased the real estate as part of a separate transaction.

[CL Pgh]

Originally Posted by XDCX

Concerning Auburn Hills, I've read that Cerberus owns Chrysler's Head Quarters and leases it back to Chrysler. That said, I don't think the WHQ building was part of their initial deal with Daimler, I think Cerberus purchased the real estate as part of a separate transaction.

Reminds me of what Cerberus did to the department store chain it bought. Separated the the realestate from the retail... then jacked up the rent and squeezed the retail store's into bankruptcy. All that was left was the properties & Cerberus. Hey wait a minute!!!

[XDCX]

Originally Posted by CL Pgh

Reminds me of what Cerberus did to the department store chain it bought. Separated the the realestate from the retail... then jacked up the rent and squeezed the retail store's into bankruptcy. All that was left was the properties & Cerberus. Hey wait a minute!!!

The fact that Cerberus has been out of the news for the past 24 hours seems strange. They're not the type to walk away from a deal with their tail between their legs.

I wouldn't be surprised to see them position themselves in the middle of a GMAC/CF alliance.

My bet is the three-headed dog who the gates of Hell will rematerialize.

[XDCX]

The latest report from Reuters indicates Fiat has advised the CAW that a Chrysler bankruptcy is still likely.

Perhaps this is just "gamesmanship" to get the remaining bond holders in-line but it's getting really old.

The news keeps shifting from bad to good to bad - it's insane.

Here's a link to the news report: http://uk.reuters.com/article/market...35465120090428

[XDCX]

As I've mentioned countless times, I'm not an expert in this area but this is how I understand bankruptcy as it relates to Chrysler and the bond holders.

As we know, the press reported the bond holders agreed to the Treasury's terms last night, clearing a major hurdle in putting a deal together. The Treasury has been negotiating with the top four banks that hold Chrysler's debt - they hold 70% of the outstanding bonds.

The issue now concerns the 30% of the bond holders who may not agree to the Treasury's offer - they have the power to force Chrysler into bankruptcy.

If Chrysler enters into bankruptcy, a judge would have the ability to force the 30% of the bond holders to accept the offer that was negotiated by the top four banks. That's the only reason Chrysler would need to enter bankruptcy.

Here's the question - If Chrysler has to use bankruptcy to "cram down" the remaining 30% of the bond holders, will they try to sever dealer agreements at the same time?

Here's a link to a New York Times report that provides more information: http://www.nytimes.com/2009/04/29/bu...ef=global-home

[Txflyer]

Originally Posted by XDCX

Here's the question - If Chrysler has to use bankruptcy to "cram down" the remaining 30% of the bond holders, will they try to sever dealer agreements at the same time?

Here's a link to a New York Times report that provides more information: http://www.nytimes.com/2009/04/29/bu...ef=global-home

If Team Obama forced GM to do it, and at a much higher rate than GM had planned, it stands to reason that they'd expect Chrysler to do the same thing.

[possum]

The age old question that has never been answered----How does reducing Dealerships save the Mfr money? Its been reported that GM will loose $32B in revenue with the Dealer reduction, but that each Dealership will be stronger. Fine, but how does that equal cost savings for GM?

[scooter]

I think their logic goes like this....fewer dealers would mean less competition for the remaining ones, they would be able to sell more vehicles and keep better grosses and have more service business. With less competition the Mfr would not have to offer as many incentives and they would be able to keep more profit on their end. The remaining dealer would increase their sales/service expand their business and order more vehicles. Soon the Mfr would realize that this is a viable market and that they under represented in this market and want to increase dealer count and then...hey maybe getting rid of dealers is not such a good idea....

[crowe]

“The option preferred by Chrysler, Fiat and the U.S. is to avoid bankruptcy”
http://www.bloomberg.com/apps/news?p...d=aRhqp0MPGb24

[crowe]

Bankruptcy looming for Chrysler

http://www.detnews.com/article/20090...g-for-Chrysler

“The "bad assets" -- some dealer agreements, debts owed to some of its lenders -- would remain in bankruptcy for an extended period and be liquidated.”

[XDCX]

Originally Posted by crowe

Bankruptcy looming for Chrysler

http://www.detnews.com/article/20090...g-for-Chrysler

“The "bad assets" -- some dealer agreements, debts owed to some of its lenders -- would remain in bankruptcy for an extended period and be liquidated.”

That's exactly what I was afraid of.

If the only reason Chrysler needs to use bankruptcy protection is to "cram down" the remaining 30% of the bond holders, why do the dealers have to get screwed?

This is either a bluff or it's total B.S. - I hope it's a bluff.

[Txflyer]

Originally Posted by XDCX

That's exactly what I was afraid of.

If the only reason Chrysler needs to use bankruptcy protection is to "cram down" the remaining 30% of the bond holders, why do the dealers have to get screwed?

Because for some reason that is what the Auto Task Force has determined needs to happen. If they screw the dealers inside of a BK filing, there is no recourse for the dealers. If done outside BK then Chrysler will be tied up for years with lawsuits in state courts.