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Firm details old Chrysler debt

Thursday, August 13, 2009

Firm details old Chrysler debt

Alisa Priddle / The Detroit News

Chrysler LLC owed $26.9 billion in liabilities and had $21 billion in assets when it filed for bankruptcy on April 30.

Court documents filed late Wednesday by Old Carco LLC — which is liquidating old Chrysler assets in bankruptcy — include more than 3,500 pages of financial information about the carmaker leading up to its Chapter 11 bankruptcy filing.

Assets yet to be liquidated include seven plants, property, equipment and inventory. Old Carco’s liabilities include lawsuits and terminated dealer, supplier and other contracts.

At the time of its filing, the company estimated it had $39.3 billion in assets, of which $2.6 billion could be liquidated, and $55.2 billion in debt.

The parts of the company deemed necessary to continue to make and sell vehicles were sold to a new company, Chrysler Group LLC, formed June 10 in an alliance with Fiat SpA. Funding for the deal came from the U.S. and Canadian governments, and $2 billion in cash was given to creditors in return for forgiving $6.9 billion in debt.

The new Chrysler Group has resumed business under new Chief Executive Officer Sergio Marchionne, who is CEO of Fiat.

Old Carco’s deadline to file the documents was today. "This is a requirement of bankruptcy law," Chrysler spokeswoman Shawn Morgan said Wednesday.

The Auburn Hills automaker reported income of $7.5 billion this year up to the date of its filing for Chapter 11 protection. That compares with full-year income in 2008 of $44.2 billion and $60.5 billion in 2007.

Among the payouts cited was about $20 million to Chrysler’s main bankruptcy law firm, Jones Day LLC, and almost $13 million to financial adviser Capstone Advisory Group LLC.

In another court filing, Motors Liquidation Co., which is liquidating old GM assets, paid its financial advisers $26.9 million from June 1 to July 10.

The reorganized General Motors Co. has cash of $1.17 billion to wind down its operations, consisting of loans from the U.S. and Canadian governments, it said in Wednesday’s filing.

Old GM’s assets include 127 properties and 50 million shares in the new GM, plus warrants. Substantially all of the assets except for the shares were pledged to the governments, it said.

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