• Sep 8th 2009 at 5:20PM
  • 13
Before there was a Motors Liquidation Co, post-bankruptcy GM's hived-off shelter for useless assets, there was Old Carco LLC. That's the company Chrysler built to house its useless assets, and unsurprisingly, it doesn't have good news for unsecured creditors. Old Carco was left with liabilities of $20.5 billion, but has less than half of that to pay off everyone it owes.

The latest accounting says there is $2.345 billion to pay things off. With a shortfall that drastic, even the U.S. Treasury and the Canadian governments are waiting for their money, with a $3.34 billion loan and $29 million in interest going not being repaid. The Treasury sent Old Carco a notice of default last month, which strikes us as a waste of a stamp and paper.

And since Old Carco isn't allowed to borrow any more money, there is almost no chance that creditors will be made whole. At this point, as the company tries to unload leftover factories and property, it looks like the best anyone's going to get is pennies on the dollar -- or just fractions of that -- and that could be for the folks first in line. Old Carco is dead, long live Chrysler...

[Source: Detroit News | Image Source: Bill Pugliano/Getty]

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    • 1 Second Ago
      • 5 Years Ago
      I haven't verified word one of the article above, but if the company has 2.345B in cash and owes 20.5B, that's already 11.44 cents on the dollar, PLUS the *proceeds* from the land dump. That's better than the last two bankruptcies I worked on, neither of which were government induced (unless you consider that bankruptcy is a protection provided by statute, but now we're teaching civics instead of division.)
      • 5 Years Ago
      So can I set up an "Old PPP corporation" and put my home loan, car loans and credit card bills in it? Man, that would be sweet. "Oh, sorry, I don't owe you all that money, that's now owed by Old PPP. Maybe you should talk to them about collecting what you're owed."
        • 5 Years Ago
        Yeah, it's called bankruptcy.
      • 5 Years Ago
      I thought this was kinda of the whole point of the old/new BS. Many of their assets declined in value once they were clearly going to end up on fire sale. Not that they were in great shape to begin with.
      • 5 Years Ago
      Just put Chrysler out of its misery, liquidate the whole damn thing and get it over with....
      • 5 Years Ago
      omg...a "REPORT" about a bankrupt company not having money to pay their loans-man who would have figured?!
      • 5 Years Ago
      Wasn't it already bankrupt?

      Considering that it's a failed company designed to have no worthwhile assets, this really isn't surprising... ("Oh my! The worthless assets are worth even LESS than we thought!")
      • 5 Years Ago
      old news but inspires:

      "Does my government bend me over? Let me count the ways...."
        • 5 Years Ago
        if Chrysler had been allowed to fail, the entire company- good and bad assets- would have been liquidated and creditors would have gotten more back.

        As it is, the government forced through a bankruptcy of their own design ignoring bankruptcy law and screwing over countless creditors.

        then hoping that a ho hum Fiat can revive a ho hum Chrysler that we might get our money back.

        you surmise correctly that I prefer a government that is less intrusive in the market. liberals will argue that otherwise all these people would be out of work. thats bull.
        the market will support X number of cars built and sold. it takes y amount of manpower to build them. if chrysler isnt building them, then Ford or Nissan or someone will. those workers will get jobs with the other companies. otherwise government is artificially inflating the employment level and reducing the efficiency of a company and ultimately its ability to make money.
        • 5 Years Ago
        Thank you, GPR...
        • 5 Years Ago
        Are you suggesting that the government should have done more to avoid this bankruptcy, or that they should have done less? I'm guessing you think the government should have done less, but then you'd still have this 10 cents on the dollar liquidation of assets, there would just be more worthless assets.

        Can win for trying.
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