Wouldn’t every business person love a deal like this one! A CNNmoney.com story entitled, “Chrysler won’t repay bailout money” reports that “An administration official confirms that a $4 billion bridge loan and $3.2 billion in bankruptcy financing won’t be paid back by Chrysler following bankruptcy.”
Chrysler doesn’t pay the $4 Billion loan or the $300 million in fees on that loan, all made with taxpayer money prior to their recently declared bankruptcy. They declare bankruptcy and get another $3.5 Billion to fund their operations during bankruptcy. What does the tax payer get? An 8 percent equity in a company that would have been out of business without taxpayer assistance. What a deal.
For what it’s worth,an Ole Seagull believes it is ludicrous that bankruptcy plan does not include a payback of at least the $3.5 billion being used to fund its operations during bankruptcy.
Excerpts from article:
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.
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