Bailout Watch 425: Chrysler is NSFWed. Still.

OK, first Chrysler Co-Prez Jim Press flies to Geneva (first class?) to schmooze with . . . not Fiat. Oh no. Press told the press that their alleged small car partner had already been to Auburn Hills and called it good. So no need to hang out with what the company’s touted as Chrysler’s savior. “No formal meetings planned,” to use the proper PR parlance [via Automotive News]. So . . . how’s that “satisfying the government’s conditions to score another $5 billion from the federal bailout buffet” thing doing? Great! “Jim Press said today that the automaker was ‘hopeful’ the automaker had all the criteria necessary to receive additional U.S. government loans.” Automaker, automaker, let me come in! Tell me exactly who owns shares in ChryCo. No? Well, then, let’s have a closer look at Press’ hopes, dreams and fears re: Chrysler’s progress on Uncle Sam’s loan criteria, shall we?

Bloomberg reports that the banks—who are required to swap $5 billion worth of debt for equity before Chrysler can mount its second raid on the public purse—aren’t playing ball. At all. And for good reason.

Chrysler LLC, needing lender concessions by March 31, isn’t negotiating with its banks because it can’t persuade them to discuss trading loans for uncertain equity, people familiar with the companies’ actions say . . .

“It’s going to be a tough sell to get the banks to give up their position for worthless equity,” said Don Workman, a bankruptcy attorney at Baker & Hostetler LLP in Washington. “The best Chrysler can hope is that the government is going to force them to do it.”

And how, pray tell could the U.S. government force banks to take the Mother of All Buzz Cuts? Well . . .

The banks, which include Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley and JPMorgan, would be first to be repaid in the case of a bankruptcy. By taking equity in exchange for debt, the banks would lose that standing they now have. The caveat is that each of the banks has taken U.S. government aid from the Troubled Asset Relief Program and may be subject to Treasury’s influence, Workman said.

“Influence?” Sounds like a job for current Cerberus Chairman and former U.S. Treasury Secretary John Snow! On this and other matters, none of the principals are saying anything—other than the extremely well compensated, jet-setting and hopeful Jim Press. Back to the art of the steal . . .

Owners take on liabilities and normally lose everything if the company goes into bankruptcy. Meanwhile, bank loans are secured against assets, such as plants, other buildings and brand names. These can be sold and the loan amounts recovered in the case of a restructuring or liquidation . . .

Chrysler told the government that banks may get 11 percent to 43 percent of their loans repaid in an “orderly wind-down” of the business.

Kaplan said the banks likely would prefer restructuring or liquidation to equity.

“If I am a secured lender, I can’t be worse off by staying the way I am,” he said. “I can only be worse off if I make the exchange, so I am not doing it. I’ll take my chances in bankruptcy.”

Our sources tell us that Cerberus has already mortgaged the entire company. In other words, assets? What assets? Unless there’s a huge Snow job afoot, ChryCo’s toast.