Automotive News has sent an alert to its subs, and it’s not just because the autoblogsphere needs more lerts (submarine joke deleted). The publication reports the official announcement: “Daimler confirms that the company is in discussions with Cerberus Capital Management regarding the redemption of its remaining 19.9 [percent ownership of Chrysler].” Redemption? I don’t think so. Anyway, what’s up with that? Well, here’s a clue: nobody’s talking about price. Riddle me this Moustache Man: if ChryCo goes down the chute marked Chapter 11, could creditors go after the still-solvent Daimler? Uh-huh. So, just as Cerberus used OPM (Other People’s Money) to finance their original purchase of the soon-to-be-ailing American automaker, it’s entirely possible that Daimler’s paying them to take Chrysler off their hands. So why would Cerberus want that 19.9 back? It would be a lot easier to ask for an undisguised federal bailout with ChryCo as 100 percernt ‘Merican. Now matter how the deal goes down, if down it goes, it’s back to” The Big Three” ’round here. Only Honda’s bigger than Ford and Chrysler now. Oh dear.
9 Comments on “Daimler Wants to Dump Last of Chrysler on Cerberus...”
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…it’s back to” The Big Three” ’round here…
debt three is more accurate.
Oh no the 19.9 could turned out to be lots more than bargained for.
These liabilities issues can turn sour to bite u in a huge ways. Open the flood/main gate for the Barbarians to pillage & plunder till nothings’ left.
Daimler at this trying times no need more aggravations period. Daimler could concentrate on her little gull wing project nurse her to leave for higher ground & the Diesotto engines.
All of the car manufacturer’s formerly known as the “Big 3″ are mere shadows of themselves and their outdated and outmoded business models. Nope the Detroit 3 is more fitting.
How can Chrysler go into Chapter 11 without taking all of Cerberus with it? Just like creditors could go after Daimler in the event of a Chrysler bankruptcy, couldn’t they go after all of the three headed dog’s other assets as well?
Now, maybe Cerberus could spin off Chrysler, wait a couple years, and then Chrysler could go under without taking down Cerberus, but as long as it’s still attached to the dog of hell, bankruptcy seems to be off the table, IMHO.
Geotpf,
I believe Chrysler can go C11 without dragging all of Cerberus along because of the three letters behind Chrysler’s name: LLC.
Limited Liability Corporation.
My wife owns her own practice. As such, her accountant and attorney set her up as an LLC so that our household cannot be held liable for anything outside of her business.
Some of the B&B here can speak to the legalities of an LLC and how it leaves Cerberus faultless, I’m sure.
Domestic Hearse-Good point, but wouldn’t Chrysler’s LLC status protect Daimler as well?
I believe it would.
Again, I must defer to Justin and his background in law to properly sort out the technicalities of an LLC…
Justin? How’s it work?
“How can Chrysler go into Chapter 11 without taking all of Cerberus with it?”
That’s what all those high priced attorneys DO all day.
All of the car manufacturer’s formerly known as the “Big 3″ are mere shadows of themselves and their outdated and outmoded business models.
Could somebody describe the Big 3 business model?
Could somebody write an improved model for them?
Maybe one of them could read it and understand what to do to make it work.
Please do not title it ” The Three Stooges”