Chrysler C11 Filings for May 1: Where's the Good/Bad Motion?

Robert Farago
by Robert Farago

TTAC’s Johnny-on-the-spot, Toxicroach, is moving offices. But his efforts on your behalf continue apace. This is his summary for the yesterday’s (May 1st) legally action.

“I’m about to pass out and I’m really sore, so please excuse me for the late filing (mine). It doesn’t especially matter since nothing too huge happened yesterday. Chrysler filed the debtor-in-possession motion (download pdf here). The Govt. is offering $4.5 billion to old Chrysler @ 3% interest. That’s $1.8 billion upon the filing of the motion, the rest on approval of the motion. There are a ton of things, and I’m too wiped out to get into every detail (and I’m not sure most of the terms are really newsworthy or unexpected) This, however, is amusing (if you’re of a lawyerly persuasion):

Affirmative Covenants. The DIP Credit Facility includes affirmative covenants relating to executive privileges and compensation, private passenger aircrafts, restrictions on expenses, access to information and right to audit, wholesale and retail financing, the American Workers Act, internal controls, record keeping, waivers, as well as affirmative covenants that are usual and customary for financings of this kind including, without limitation, compliance with the Approved Budget; delivery of financial statements; delivery of weekly updated 13-week cash flow projections and variance reports, compliance certificates from Chrysler’s chief financial officer containing a calculation of certain covenants; delivery of reports, accountants’ letters, projections, officers’ certificates, notices of default, postpetition litigation and other material events, and other information requested by each DIP Lender; payment of postpetition taxes and other ordinary course obligations; continuation of business and maintenance of existence and material rights and privileges; compliance with laws and material postpetition contractual obligations; maintenance of property and insurance; maintenance of books and records; the right of each DIP Lender to inspect property and books and records; compliance with environmental laws; and certain further assurances.

(DIP Credit Facility § 5.1 – 5.19)

Most of the document appears to be the credit agreement between the Dept. of Treasury and Chrysler. There is also a motion to allow financing with GMAC ( dowload pdf here), and a motion to seal the exhibits relating to that motion for “competitive reasons” ( download pdf here). This seems fairly legit.

Whatever the results of the hearing I mentioned earlier on the emergency motions of the other day were, I can find no evidence of it yet. I would anticipate that they will be granted.

A Canadian natural gas company filed an objection to the emergency motions because it doesn’t want to be forced to sell Chrysler natural gas ( download pdf here).

The vast majority of the days events appear to be an absolute flood of lawyers from everyone from the UAW to the Mesothilioma Victims Association to Magna. Way more than the 21 from yesterday. About 40 more showed up today for a total of 63 or so.

From the “How Much is This Boondoggle Going to Cost Me?” Department, there’s an application for “conflicts counsel” pay rate ( download pdf here):

26. In accordance with section 330(a) of the Bankruptcy Code, the Debtors propose to compensate the Togut Firm on an hourly basis at its customary hourly rates for services rendered, plus reimbursement of actual, necessary expenses incurred by the Togut Firm. The primary members of the Togut Firm who will be handling the above matters and their current standard hourly rates are: (i) partners $760 to $890; (ii) associates and counsel $295 to $680; and (iii) paralegals and law clerks $135 to $265.

The shoe that didn’t drop: the anticipated motion to sell all the good assets to NewCo. New York local rules require 20 days notice to interested parties, so each day they don’t file it pushes the first possible date to get the New Chrysler going further down towards the end of May. Fiat was claiming that the motion would be filed yesterday, so make of it what you will. This is the absolutely critical motion for the whole Good Twin/Evil Twin plan so I don’t know what is taking so long.

Robert Farago
Robert Farago

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  • ZoomZoom ZoomZoom on May 02, 2009
    from that freep article: About 1,800 Chrysler retirees were shocked to discover that their benefit payments were voided Friday morning. Lynn Feldhouse of Rochester Hills actually saw the deposit disappear as she checked her bank account online. "This can't be good," Feldhouse said. "I called the bank, and they told me there was nothing they could do because they got a message from Chrysler telling them to reverse the entry." I never understood how people would join a union because they didn't trust the management of the company they work for... ...but then proceed to trust that a pension would be there for them! I know I've oversimplified matters here, but to me it's still denial of the worst sort.
  • Pig_Iron Pig_Iron on May 02, 2009

    I went to my local CDJ dealer, it was after hours, the showroom only has used cars(?), but there's new ones on the lot, although only half as many as a month ago. Weird. I friend of mine works there and I asked her a week ago - she said everything fine, just slow. I'm scared to ask again since the changes.

  • Mikey My late wife loved Mustangs ..We alway rented one while travelling . GM blood vetoed me purchasing one . 3 years after retirement bought an 08 rag top, followed by a 15 EB Hard top, In 18 i bought a low low mileage 05 GT rag with a stick.. The car had not been properly stored. That led to rodent issues !! Electrical nightmare. Lots of bucks !! The stick wasn't kind to my aging knees.. The 05 went to a long term dedicated Mustang guy. He loves it .. Today my garage tenant is a sweet 19 Camaro RS rag 6yl Auto. I just might take it out of hibernation this weekend. The Mustang will always hold a place in my heart.. Kudos to Ford for keeping it alive . I refuse to refer to the fake one by that storied name .
  • Ajla On the Mach-E, I still don't like it but my understanding is that it helps allow Ford to continue offering a V8 in the Mustang and F-150. Considering Dodge and Ram jumped off a cliff into 6-cylinder land there's probably some credibility to that story.
  • Ajla If I was Ford I would just troll Stellantis at all times.
  • Ronin It's one thing to stay tried and true to loyal past customers; you'll ensure a stream of revenue from your installed base- maybe every several years or so.It's another to attract net-new customers, who are dazzled by so many other attractive offerings that have more cargo capacity than that high-floored 4-Runner bed, and are not so scrunched in scrunchy front seats.Like with the FJ Cruiser: don't bother to update it, thereby saving money while explaining customers like it that way, all the way into oblivion. Not recognizing some customers like to actually have right rear visibility in their SUVs.
  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
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