Jalopnik On Course to Receive Old Chrysler Money
Famous for being a failed savior, a financial hound of Hades has come to the aid of Gawker Media and its many online publications.
Cerberus Capital Management L.P., the infamous private equity firm that produced headline gold — and not much else — after its ill-fated 2007 purchase of Chrysler, is now offering cash to another bankrupt company. The firm announced it will hand Gawker $22 million to keep the lights on while the media giant completes its bankruptcy proceedings and sell-off.
Gawker filed for Chapter 11 bankruptcy on June 10 after being ordered to pay $140 million in damages to former wrestler Hulk Hogan. The verdict followed a lawsuit that stemmed from Gawker’s airing of a sex tape of the former WWF star.
The Cerberus cash — offered as a loan, not a gift — allows Gawker to pay its employees, while also paying off its lender bank. Without it, the company would be forced to liquidate.
In 2007, Cerberus bought a controlling stake in DaimlerChrysler, which then spun-off Chrysler LLC. Within two years, the economy imploded and the automaker filed for bankruptcy, wiping out the firm’s 80-percent stake. Cerberus shuffled away as the federal government intervened to save the automaker.
Gawker has a buyer lined up — no, not Fiat — so the cash just has to tide the company over until media company Ziff Davis LLC plunks down $90 million in its ownership bid. (A July auction could see other players outbid Ziff Davis.)
For the sake of Gawker-owned automotive publication Jalopnik, let’s hope former Cerberus-installed Chrysler CEO (and Home Depot fan) Bob Nardelli doesn’t read this old column.
[Sources: Wall Street Journal, Reuters] [Image: Greg Gjerdingen/ Flickr]
Everyone at Jalopnik must be forced to drive a Crossfire as a daily driver until said loan is paid off.
"after its ill-fated 2007 purchase of Chrysler" Ill-fated but brilliantly planned. Cerberus is a financial strip mining operation.
I'd much rather have the Jaguar XJ8 next to the Chrysler in the photo.
Ah, the company whose name literally means "the hound of Hades." The company whose investments chairman is noted half-wit Dan Quayle. The company which decided Bob Nardelli, crowned by CNBC as America's worst CEO, was just the guy to run Chrysler. Well, this should be good. *munches popcorn*