Chrysler’s financial situation may be worse than anyone had thought. Their bankruptcy plan involves selling its healthy operations to “New Chrysler”, a company owned by the worker union trust, Fiat, and the Canadian and US governments. The remaining will be used to settle outstanding claims.
Here comes the killer – Chrysler’s lawyers from Jones Day have asked for special priority for their fees to be paid. University of Pennsylvania law professor David Skeel says he has never heard of any lawyer ask for this in a bankruptcy case as they normally don’t take cases where there is little chance of being paid.
Skeel suspects Jones Day are not optimistic about a payment, and because they know what is going on, that is very scary indeed.