Chrysler won't repay bailout money

Chrysler won't repay bailout money
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.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: May 6, 2009: 3:44 AM ET

NEW YORK (CNNMoney.com) -- Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.

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.

An Obama administration official confirmed Tuesday that Chrysler won't be repaying the loans, though a portion of the bridge loan may be recovered by Treasury from the assets of Chrysler Financial, the former credit arm of the automaker which is essentially going out of business as part of the reorganization.

"The reality now is that the face value [of the $4 billion bridge loan] will be written off in the bankruptcy process," said the official, who added that the 8% equity stake that Treasury will be receiving as part of the company's reorganization is meant to compensate taxpayers for the lost money.

"While we do not expect a recovery of these funds, we are comfortable that in the totality of the arrangement, the Treasury and the American taxpayer are being fairly compensated," said the official.

More:

http://money.cnn.com/2009/05/05/news/companies/chrysler_loans/?postversi...

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So when can I expect my Chrysler 300???

Hooda Thunkit

SUCKERS! I predicted this a while ago. Government "loans" to the auto companies just won't get re-paid. PERIOD.

It's because it's due to a "global car slump". People aren't buying any cars....or so I've been told many times on here.

While it's true that there are less cars being sold you can't overlook the mismanagement of Chrysler and GM. Why isn't Japan bailing Toyota or Honda out? Maybe because they can still sell SOME cars... even in a slump.

MikeyA

Sales are down for everyone...but Ford isnt doing as bad since they got a PR boost from not taking a bailout...I wanted a challenger...but screw it..I'll but a new truck instead...a FORD truck....

Everyone who thought they were saving money by buying jap.....just got to pay for GM and chrysler anyways......

I bet they would have saved more money in the long run if they had bought from the big three in the first place...as they wouldnt have needed the bail out money....and their tax money wouldnt be bailing out the UAW and going down a black hole...

Buwahahahahahahaha!

Suckers.

The Obama administration: the biggest swindle in world history.

The libs were feaking out over millions to haliburton...now trillions disappear...and they cheer MORE MORE MORE!!!!!!

“Political correctness is a doctrine, fostered by a delusional, illogical minority, and rabidly promoted by an unscrupulous mainstream media, which holds forth the proposition that it is entirely possible to pick up a turd by the clean end.”

The administation under JB doled out trillions to their buddies over eight years. It was well disquised.

Unfreakin' believeable. 7 billion dollars gone.

This whole bailout scheme was a crock from the get-go. We never should have bailed out Wall Street. We never should have bailed out the automakers. We never should have bailed out the banks. We have rewarded irresponsible and bad behavior while those who pay their bills on time, those who don't buy more house than they can afford, those who's wages can't keep up with the rising cost of living get to pay for all of this.

Both parties are responsible for this and this is proof positive why we need a third party that actually represents ordinary Americans who don't have the checkbook to play in our current, corrupted beyond belief, political system. This simply stinks.

Political Championship Wrestling- putting politics in proper perspective by presenting it as pro wrestling.

Coming in January, a political satire about the sorry state of American Politics- Jesusland vs. Progressiveville.

I totally and wholeheartedly agree with everything you said.

MikeyA

Still chump change compared to the Wall St heist.

This is more proof that if a company is "too big to fail", then it's just too big--period, and needs to be broken into smaller companies in order to foster greater competition and a healthy economy. Start enforcing anti-trust laws!

Pink Slip

I agree.

Ooooh, does this mean I'm now parroting left wing talking points? :)

Political Championship Wrestling- putting politics in proper perspective by presenting it as pro wrestling.

Coming in January, a political satire about the sorry state of American Politics- Jesusland vs. Progressiveville.

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