Chrysler LLC's tentative agreement with some of its largest creditors may have helped it clear a significant hurdle in the race to avoid bankruptcy. But big obstacles remain. The automaker is reportedly close to a debt-for-equity deal in which lenders would write off a majority of Chrysler's $6.8 billion debt in exchange for a less than 10% stake. (Deal Pipeline subscribers can find the details
here.)
In this edition of Inside The Deal, bankruptcy attorney Sandra Mayerson says holdouts in the lender group may remain, and she's not convinced they will agree to the deal terms, which are a long way from what creditors had proposed. There's also a possibility, says Mayerson, a partner with Squire, Sanders & Dempsey LLC, that a planned partnership with Fiat SpA could collapse. Chrysler faces a government-imposed Thursday deadline to finalize the Fiat alliance or be cut off from further public assistance. See the video below or download it at
iTunes.
- Suzanne Stevens
