Lawyers request show direness of Chrysler situation

Chrysler LogoChrysler’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.

Source

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Paul Tan

After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history.

 

Comments

  • longjaafar on May 12, 2009 at 7:22 pm

    test

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  • longjaafar on May 12, 2009 at 7:28 pm

    The problem with US auto makers is that the unions are too strong. Even during a complete shutdown, workers are still paid 80%of their salary, and they are given pensions and all sorts of perks which are unheard of in countries like Japan and the eastern block.

    That is why one of the major stumbling blocks that hindered any form of restructuring is the unions, which weild so much power. I therefore doubt if the industry will ever get back on their feet again, not in thr present from, at least.

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  • Black Dog on May 12, 2009 at 7:49 pm

    Yes, longjaafar, you are absolutely right. Sometimes to get over this, they have to let it go bankrupt, let the new owners draw up a new pay scheme. When the company is losing money, how to think about the workers, when in this case, the workers are sucking all the money away?

    So Paul, is it allright to buy a Chevrolet here? I'm sure it's difficult for you to answer but if given a choice, definately try to avoid, right?

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  • mystvearn on May 13, 2009 at 5:25 am

    Not only that. Chrysler is making the wrong cars. Forget their old history. Seems like their styling department came from the 70's car technology of 80's.

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