Chicago Bankruptcy Lawyers & Attorneys

Chrysler had a deadline of April 30, 2009, to form an alliance with Fiat SpA and qualify for further U.S. aid.  Fiat said they will form an alliance with Chrysler even if they file bankruptcy.  But, no one will say if Chrysler will file.  During this last week, Chrysler has almost accomplished a set of goals from the U.S. Treasury, which includes cost-saving labor agreements with its unions and a tentative agreement to eliminate the majority of its bank debt.  The CEO said that they are still waiting to see whether the smaller lenders will accept that accord, which would provide $2 billion in cash in exchange for eliminating $6.9 billion in secured debt.  The reason Chrysler might still file a bankruptcy is the prospect that some of their 46 lenders will balk at the cash offer.  Chrysler, Fiat and the U.S. prefer to avoid bankruptcy.  The Treasury loaned Chrysler $4 billion and would lend $6 billion more if they form an alliance with Fiat.  General Motors Corp. is also going down the same path that will conclude on June 1.  They offered 10% of GM’s ownership in exchange for giving up $27.5 billion in unsecured debt.  As for the Chrysler-Fiat alliance, Fiat would take an initial stake of 20% in Chrysler in exchange for giving Chrysler access to their small-car technology.  But, the Vice Chairman of Fiat said” Until Thursday, we won’t have many answers.  We will have to wait.”