A Chrysler advisor has confirmed it: we’ll never see Chrysler’s government-provided $3.34 billion debtor-in-possession (DIP) financing again. Nor will Canada recoup any of the $1.16 billion they spent helping keep the zombie automaker alive through bankruptcy. Oh, and you can forget the $4 billion worth of US “loans” already bestowed upon Auburn Hills. As The Detroit News reports, all of it’s disappeared down the ChryCo-shaped rathole. “Ron Manzo, a senior financial advisor to Chrysler, said it is ‘highly likely’ the governments will recover nothing. He also noted that Chrysler isn’t required to pay interest on the $4.5 billion in debtor-in-possession financing . . . After Chrysler filed for bankruptcy Thursday, Obama administration officials refused to say how much the government might recover of the $4 billion that the Bush Administration loaned the company in January. A government official confirmed on Monday that the Treasury is unlikely to get any of the first $4 billion but declined to comment on whether the Treasury or Chrysler will be repaid all or part of the debtor in possession financing.” And you do know the feds have promised the new new Chrysler $6 billion in exit financing, right? And [an unspecified amount of] money for GMAC.

Toxicroach says he’s not a C11 guy by training; C7’s more his style. Still, it’s obvious that he shares our OCD. Which is not so good for him. But very good for the greater good. Thanks, bug man.

“Nuts & Bolts: The first day emergency motions were granted for the most part. Chrysler can continue on and doesn’t have to file a complete list of creditors or a complete petition until June. Some minor creditor action that I’m going to mostly ignore. We already covered the main objections, but Uzzi (counsel for Chrysler’s non-TARP engorged creditors) filed another objection to the use of DIP financing (download pdf here). This sums up their argument quite nicely:

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After crying that bankrupt automakers can’t sell cars (as in, “there but for the grace of the taxpayers go we”), Chrysler is requesting $753 million to do what it said was impossible. And who minds profit-draining record incentives when taxpayers are picking up the tab? Automotive News [sub] breaks down Chrysler’s request for $4.6 billion of DIP financing, and reveals that incentives are no longer just about moving metal.

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Our C11 guy Toxicroach checks in:

With up to 1,200 dealers and 16 factories set to be uninvited from “the reinvented GM,” union locals and dealerships with their livelihoods on the line are preparing to fight the future. With the UAW leadership on board for an equity position in the new GM, locals are scrambling to show their willingness to give up once-cherished perks to keep their plants open. Bloomberg reports that workers at GM’s Spring Hill plant have ratified a local agreement that “allows GM to schedule its hourly workers for weekend shifts without paying special premiums, ends the policy of paying overtime based on a daily shift instead of a 40-hour workweek and loosens the work rules so that workers may be used for a broader variety of tasks.” Sadly, since Spring Hill’s Chevy Traverse production is likely to be moved to Lansing Delta to take over Saturn Outlook production capacity, this sudden rash of reality probably won’t save the plant.

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Section 2.15 Viper. (a) Subject to Section 2.15(b) below, notwithstanding any provision of this Agreement to the contrary, (i) Seller may, at its option, sell Intellectual Property and Purchased Inventories that relate solely to Vehicle Production (as defined in the Transition Services Agreement) and are not necessary or useful in any other line of business (the “Viper Assets”) prior to the Closing Date in an arm’s-length transaction to a party other than Purchaser on terms and conditions reasonably acceptable to the Purchaser, provided that the right of the Seller to sell the Viper Assets shall terminate on June 8, 2009 if no binding written agreement to purchase the Viper Assets has been executed and delivered by a bona fide purchaser at such time, and (ii) in connection with any such sale, Seller and Purchaser, as applicable, shall grant to the purchaser of the Viper Assets on terms and conditions reasonably acceptable to the Purchaser a non-exclusive license of other Intellectual Property of the Seller necessary for Vehicle Production as currently conducted.

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Toxicroach will be here any moment to give us his take on the Chrysler C11 case’s “relax don’t do it” anti-auction action. Meanwhile, here’s a quick heads-up [via Bloomberg]: “The group, calling itself Chrysler’s non-TARP lenders, in reference to the Troubled Assets Relief Program, said the proposed sale to an entity to be managed by Fiat is ‘tainted’ because the process was dominated by the U.S. government, according to papers filed today in U.S. Bankruptcy Court in Manhattan. The group also said the short period of time given to evaluate the sale was improper and the hearing set for today on the bid procedures should be delayed.” And so it was. For a day. Meanwhile, the money shot: “The court should not permit a patently illegal sales process to go forward.” As TTAC reported earlier, the kvetching could well be a simple negotiating ploy to force the feds to pay off the non-TARPies, at a higher rate than the big banks (no less).

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When GM banned TTAC from its press cars some thirty-five years ago, I told the local delivery guy not to fret (as if). After GM filed for C11, things would change. The warm winds of glasnost would sweep through the company’s corridors, opening the company’s corporate culture to outside criticism. A new era of openness and honesty would begin. Man did I get the munchies that day. Anyway, we shall see. Meanwhile, with 27 days left to go, TTAC’s not riding phat in no Pontiac and it’s the same old spinmeistery at RenCen. Here’s what I discovered in GM’s increasingly taciturn press site this morning:

DETROIT – General Motors is proceeding to the next step with respect to the sale of Saturn. A number of potential buyers have surfaced and expressed interest in the Saturn brand and retailer network. GM will be reviewing expressions of interest from the potential buyers and will look to secure an agreement with a specific buyer later this year. S.J. Girsky&Co. has been retained by GM as advisor for this transaction. Saturn will continue to keep its retailers updated on its progress throughout this process.

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Let’s see what comments this one gets: Seven Japanese companies have applied for the US government’s relief program for auto parts and materials suppliers of GM and Chrysler, the Nikkei [sub] says.

The program earmarked $5 billion in public funds to make suppliers whole who are owed money by the two artists.
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More documents were filed in the Chrysler bankruptcy case. TTAC ace commentator and bankruptcy briefer, Toxicroach, gives us the 411 on the latest C11 maneuvers:

“Only four events today as of 5 p.m., only one of value. Either I misread prior docket entries or the 5/1/09 hearing was just to set a date for the real hearing, but the hearing on the emergency motions (first day motions is what they have been calling them) will be 5/4/09 at 10 a.m. I imagine it will be a zoo in Courtroom 523 this Monday. Still no bankruptcy ‘fast track’ 363 motion.

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We got a few “so what’s” a couple of wild-ass days ago when we whispered that Chrysler would be launching a new ad campaign using government funds earmarked for struggling parts suppliers. But setting aside the supplier screwing (yes, advertisers “supply” Chrysler, and with no production, why worry about components?), this means we will be treated to the launch of yet another New Chrysler. This will mark the second such dawning in just about a year. AdAge (via Automotive News [sub]) confirms the rumor, reporting that the responsible ad firm (BBDO, Detroit) also just happens to be Chrysler’s second-largest unsecured creditor ($58.1 million). And Judge Gonzalez still gets to decide whether the Mad Men will be paid out by the government’s “critical vendor” program. Anyway, the new campaign is being termed “educational,” with Chryco spokesfolks explaining “companies in this kind of situation need to communicate more rather than less.” Because sometimes having the President for a pitchman just isn’t enough.

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TTAC commenter Bluecon points us to Bloomberg, who reveal the identities of some of the 100-odd Chrysler bondholders recently described by President Obama as “hedge fund holdouts.” Yale University, Oaktree Capital Management and assets managed for the University of Kentucky, Halliburton, Kraft Foods Master Retirement and the Bill and Melinda Gates Foundation top the name-recognition list. According to that report, the government plans to ask Judge Gonzalez to let it pay the creditors in that group $2 billion, or 29 cents on the dollar, to end their claims. That’s an interesting strategy, considering the “not-yet-TARPed” bondholders already turned down an offer at 33 cents on the dollar. Let’s see how forcefully the government “asks” Judge Gonzalez to allow the cramdown. Or whether rumblings of a better deal materialize. (Image from Computational Legal Studies‘ amazing interactive map of TARP recipient campaign donations and the US Senate)

With TARP money, of course. Or so says our man on the inside of Chrysler’s bankruptcy proceedings. And apparently the holdouts will get even more than the already TARPed bondholders. Which means that although Obama may not “stand with” the “hedge fund holdouts,” apparently he’s OK with writing them a check for their trouble(d assets). Or maybe someone in the Treasury just made the connection: the only people who aren’t playing ball in this ends-justify-the-means “bankruptcy” call themselves “The Non-TARP Bondholders.” TARP money has made everyone else compliant with Treasury’s union, so obviously the solution is to buy out the holdouts with just a little more TARP. After all, does anyone think Fiat, the UAW or the already-TARPed bondholders would be embarking on this ship of fools if government cash weren’t paying the way?

Now that the no-money Fiatsco is (sort of) done and in the hands of the courts and armies of lawyers (what a reassuring thought), Fiat is fixing the sights of its lupara [see pic above] on another target that carries the ripe fruit of billions of government money: Opel.

“Now we have to concentrate on Opel,” Sergio Marchionne said in an interview with La Stampa. “They are our ideal partners.” (Reassuring thought #2: Chrysler must then be less than ideal . . . .) Reuters reports that “Marchionne coughed throughout the interview and admitted to being tired after months of talks leading up to the Chrysler deal,” giving rise to suspicion that Marchionne had contracted swine flu—an inherent risk when rolling with the pigs. Or it could be something worse than what a dose of Tamiflu could heal:

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TTAC’s Johnny-on-the-spot, Toxicroach, is moving offices. But his efforts on your behalf continue apace. This is his summary for the yesterday’s (May 1st) legally action.

“I’m about to pass out and I’m really sore, so please excuse me for the late filing (mine). It doesn’t especially matter since nothing too huge happened yesterday. Chrysler filed the debtor-in-possession motion (download pdf here). The Govt. is offering $4.5 billion to old Chrysler @ 3% interest. That’s $1.8 billion upon the filing of the motion, the rest on approval of the motion. There are a ton of things, and I’m too wiped out to get into every detail (and I’m not sure most of the terms are really newsworthy or unexpected) This, however, is amusing (if you’re of a lawyerly persuasion):

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