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Chrysler LLC Statement in Response to Indiana State Treasure


 
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Code3TJ
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Joined: 01 Jan 2004
Location: Uzbekistan

PostPosted: Mon Jun 08, 2009 8:55 am    Post subject: Chrysler LLC Statement in Response to Indiana State Treasure Reply with quote

I thought this was rather interesting given the percentages of debt they own. - C3TJ

Auburn Hills, Mich., May 25, 2009 - Indiana State Treasurer Richard Mourdock is protesting Chrysler LLC's Chapter 11 proceeding and sale on behalf of three state pension funds that he oversees.

Chrysler strongly believes Indiana Treasurer Mourdock’s position is wrong. Satisfying the Indiana Treasurer’s demands would lead to the liquidation of Chrysler, resulting in the loss of more than 4,000 Chrysler jobs and 9,000 retiree pensions in Indiana alone.

The combined Chrysler-related investments in the three state pension funds in question totalled approximately $17 million. The cumulative loss on these investments under the proposed transaction would be approximately $2 million. Chrysler’s liquidation analysis shows first lien lenders would get between zero and 18 cents on the dollar in liquidation, versus 29 cents in the proposed transaction. However, Chrysler believes this range is unlikely and that there is low probability of a high-side outcome. The company believes it is more likely to be on the very low end, as for the entire time that Chrysler has been in Chapter 11, it has had very few bids for its assets. Thus, under a liquidation scenario, the loss to Chrysler’s employees, suppliers and dealers would be far more: in the tens of billions of dollars.

Treasurer Mourdock has expressed that he takes his "oath of office and fiduciary responsibilities very, very seriously.” Chrysler believes Treasurer Mourdock is risking significantly further loss, and would be living up to his fiduciary responsibilities by accepting the terms that 98 percent of other creditors accepted. The Treasurer's actions lead one to wonder if his motives are financial or political.

Chrysler is committed to supporting its operations in Indiana, where more than $150 million are paid annually to Chrysler employees, $20 million in state taxes are paid by Chrysler employees, $3 billion of materials are purchased from more than 200 Indiana-based suppliers, and approximately 3,750 people are employed at 75 Chrysler dealerships. Additionally, Chrysler has donated more than $6.5 million to non-profit and community organizations in Indiana statewide in the past 10 years.

Important facts to note:

-The three funds Treasurer Mourdock oversees are:

- Indiana State Teachers Retirement Fund – This is a reported $7.8 billion fund. The Chrysler debt is less than 1 percent of the fund ($32.2 million or .466 percent of Chrysler first lien debt)
- Indiana State Police Pension Trust – This is a reported $250 million fund. The Chrysler debt is less than 1 percent of the fund. ($1.3 million or .019 percent of Chrysler first lien debt)
- Indiana Major Move Construction – This is a reported $2.5 billion fund. The Chrysler debt is less than 1 percent of the fund ($8.8 million or .128 percent of Chrysler first lien debt)

-The combined Chrysler debt to the three funds is $42.3 million (.6 percent of Chrysler’s first lien debt)

-While the three funds have a face value of $42.3 million, the purchase price was approximately $17 million. We expect they will receive $15 million, for a total investment loss of $2 million.

-Under Chapter 11, Chrysler’s first lien creditors were allocated $2 billion (instead of the $7 billion in original debt). Ninety-eight percent of the first lien creditors have agreed to this allocation.

-The Indiana Treasurer is willing to put Chrysler in liquidation over less than 1 percent of the three funds assets.
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hutchman
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Joined: 07 Feb 2007
Location: Kennewick, WA

PostPosted: Mon Jun 08, 2009 8:25 pm    Post subject: Reply with quote

What a mess.............GM too.......
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