Chrysler
CHRYSLER
SYNOPSIS On April 30, 2009, Chrysler Motors, the third largest automobile manufacturer in the United States, filed for bankruptcy protection under Section 363 of Chapter 11 of the U.S. bankruptcy code in the Manhattan Bankruptcy Court along with its 24 wholly-owned U.S. subsidiaries. Included in the bankruptcy filing for Chrysler, it announced that they had established a global strategic alliance with Fiat SpA. The plan for Chrysler was to provide the public with a new face to the company and Fiat would hold a 20 percent stake that would ultimately increase up to 35 percent. The Voluntary Employees Benefit Association (VEBA) would hold 55 percent stake, 8 percent would be held by the U.S. Treasury Department (US Treasury), the Canadian government would hold 1.33 percent and Ontario government would hold 0.67 percent. Even after receiving financial aid in the form of a federal loan Chrysler was struggling to keep their head above water. In January 2009 the company had received a federal loan in the amount of 4 billion US dollars compared to the 7 billion US dollars loan that it had requested. Chryslers declining sales was struggling to continue its operations. In their Restructuring Plan for Long Term Viability the company had asked for additional 2 billion US dollars over the already 7 billion US dollars it had initially requested. The US government made a series of stipulations that Chrysler had to comply with to receive the additional federal loan. Chrysler was required to make an alliance with Fiat before April 30th, 2009 and the company was also required to restructure its debt and negotiate with United Auto Workers and Canadian Auto Workers to reduce costs. Despite being able to come to an agreement with Fiat as well as agreements to reduce cost with UAW and CAW it had failed to come to an agreement with all of its creditors to agree to a debt restructuring. This all forced Chrysler to file for bankruptcy protection. Many of
SYNOPSIS On April 30, 2009, Chrysler Motors, the third largest automobile manufacturer in the United States, filed for bankruptcy protection under Section 363 of Chapter 11 of the U.S. bankruptcy code in the Manhattan Bankruptcy Court along with its 24 wholly-owned U.S. subsidiaries. Included in the bankruptcy filing for Chrysler, it announced that they had established a global strategic alliance with Fiat SpA. The plan for Chrysler was to provide the public with a new face to the company and Fiat would hold a 20 percent stake that would ultimately increase up to 35 percent. The Voluntary Employees Benefit Association (VEBA) would hold 55 percent stake, 8 percent would be held by the U.S. Treasury Department (US Treasury), the Canadian government would hold 1.33 percent and Ontario government would hold 0.67 percent. Even after receiving financial aid in the form of a federal loan Chrysler was struggling to keep their head above water. In January 2009 the company had received a federal loan in the amount of 4 billion US dollars compared to the 7 billion US dollars loan that it had requested. Chryslers declining sales was struggling to continue its operations. In their Restructuring Plan for Long Term Viability the company had asked for additional 2 billion US dollars over the already 7 billion US dollars it had initially requested. The US government made a series of stipulations that Chrysler had to comply with to receive the additional federal loan. Chrysler was required to make an alliance with Fiat before April 30th, 2009 and the company was also required to restructure its debt and negotiate with United Auto Workers and Canadian Auto Workers to reduce costs. Despite being able to come to an agreement with Fiat as well as agreements to reduce cost with UAW and CAW it had failed to come to an agreement with all of its creditors to agree to a debt restructuring. This all forced Chrysler to file for bankruptcy protection. Many of