REPORT: Old Carco (read: "Bad Chrysler") to not repay $4B in TARP loans
The Detroit News reports that what's left of the old Chrysler LLC (which has been renamed Old Carco), has filed court papers saying that the $4 billion will likely never be repaid. New Chrysler is not legally responsible for that debt and Old Carco doesn't exactly have considerable assets. And the government isn't the only debt-holder that isn't going to get its cash. Many secured and unsecured creditors will be unlikely to see their cash, thought some $21 million in secured debt could be paid. Old Carco contains the bad assets not purchased by the new Chrysler when it exited bankruptcy in the spring. The sale of those bad assets, which includes plants, tooling and miscellaneous items like old company cars, will help pay back some of the money creditors lost.
Lawyers working on the bankruptcy case say it take years before the book is finally closed on Old Carco. One item that could help drag matters out is a $25 billion lawsuit Old Carco filed against former owner, Daimler.
[Source: The Detroit News | Image: Bill Pugliano/Getty]
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