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$4 Billion in Chrysler Bailouts Gets Written Off
In brief: Chrysler's remnant company, Old Carco LLC, filed Chapter 11 bankruptcy Tuesday. The filing leaves $4 billion in TARP loans unpaid.
After re-organization earlier this year, Chrysler put most of its troubled assets into a new company called Old Carco LLC (how original). That company has now filed for Chapter 11 after having sold off all of the assets it could.
The reorganization left Old Carco holding about $4 billion in Troubled Assets Relief Program (TARP) debt as well as about $21 million in secured debt to other creditors.
The secured debt will be paid upon dissolution of the company through the bankruptcy proceeding, auctioning off real assets to repay the debt. The $4 billion in TARP loans, however, is unsecured debt and would not likely be paid.
And so ...
The hearing for this filing will be held January 21, 2010.
Photo credits: Edmunds
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