The battle to restructure Chrysler is about to go public, and could get messy, Michael de la Merced writes for the New York Times. After failing to get all the automaker’s debt-holders in line, the government prepared a “prepackaged bankruptcy,” a Chapter 11 filing with a reorganization plan that has most of Chrysler’s creditors behind it. But dissenting creditors will be fighting hard for a bigger piece of the pie.
If the government can get more than 50% of the debt holders, and two-thirds of the total debt value, to agree on its settlement, the bankruptcy court can force the others to comply—but it’s unclear if the government has that much support. If it can, it’ll form a new entity with Chrysler’s desirable assets, then divide it as planned among itself, the United Auto Workers and Fiat.