Friday, May 15, 2009

Report : Chrysler Bankruptcy Could Take up to Two Years, and not 60 Days

When President Obama announced Chrysler's filing for Chapter 11 bankruptcy, he said that their bankruptcy would take from 30-to-60 days to finish, and then would team up with Fiat. However, things seem to be different.

A report from Bloomberg says that the 60 days announced by Obama at a press conference at the end of April only applies to the sale of Chrysler's best assets to a new entity held by Italy's Fiat S.p.A., an auto workers health trust and the U.S. and Canadian governments. As for the bad entities, which contains non-valuable assets like shuttered plants and be responsible for most of the companies debts and liabilities. Governments, creditors and any one else owed money by Chrysler would have to wait for these bad assets to be sold.

Which means, to get all the entities sold, and Chrysler repaying its debts and liabilities may take up to two year. By the time, Chrysler is going to cut any "bad" assets that may hurt the company. Therefore, we may see some Chrysler cars go out of production as part of "Bad Chrysler". As for "Good Chrysler", they will stay, under the leadership of Fiat.

Source : [Bloomberg]

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