Chrysler Won’t Re-pay 3.7 Billion

Chrysler won’t repay $3.7 billion TARP loan
Plan filed with bankruptcy court has no provision to return money
updated 2:39 p.m. CT, Tues., Dec . 15, 2009

NEW YORK – The U.S. Treasury will not recover any portion of the $3.7 billion still outstanding in loans it made to automaker Chrysler under the Troubled Asset Relief Program, according to the terms of a plan filed with bankruptcy court on Tuesday.

The U.S. government has filed proofs of claim for unpaid principal, interest, fees and expenses, but “will receive no recovery on account of such claim,” according to court documents filed on behalf of Old Carco LLC, the units of Chrysler that remain under bankruptcy protection while they are liquidated.

The proposal was laid out in a disclosure statement filed with the New York bankruptcy court in Manhattan.

A disclosure statement is a comprehensive document sent to creditors before they vote on a plan of reorganization. The Old Carco plan also proposed repaying Class 1 priority claims in full.

The case is In re Old Carco LLC, US Bankruptcy Court, Southern District of New York, No. 09-50002.

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