AFSCME 3357-HOF'S BLOG

Chrysler's Creditors Make Counteroffer
Offer to reduce 35% of Debt & take Minority (40%) Equity

Chrysler (guided by PTFOA) wanted the major lenders to agree to reduce their debt to 15% of face value. The lenders didn't exactly jump at the deal. Chrysler's debt, unlike GM's, is mostly secured. According to the Wall Street Journal, the lenders think they could get about 65% of face value through liquidation. The lenders' counteroffer, conveyed this afternoon is to reduce their debt by only 35% and in exchange to take a minority stake in the company, 40% by some accounts. Oh yes, and they want Fiat to put some money into the company as well.

With only 9 days left until D-Day, April 30, this is looking like an especially challenging deal to get done. Perhaps Monty Hall could come out of retirement. (By the way, he's Canadian, so we'll have to keep an eye on him.)