Posted On: April 2, 2010
Jacksonville Business Bankruptcy Attorney Follows Chrysler Chapter 11 Reorganization
A Jacksonville bankruptcy attorney is closely following the Chrysler Chapter 11 reorganization, and found comments made by CEO Sergio Marchionne at the New York International Auto Show this week encouraging about the carmaker’s future.Marchionne noted that Chrysler, which entered Chapter 11 bankruptcy last May and emerged in mid-June with federal government assistance, expects to break even this year, and has $5 billion in cash on hand that it is utilizing for aggressive new product development.
Fiat took management control of Chrysler after its Chapter 11 reorganization, and Marchionne, who also heads Fiat, said that Chrysler expects to sell 11.5 million vehicles in 2010, up from 10.4 million in 2009.
He also noted that the company’s Chapter 11 bankruptcy filing and reorganization was not without controversy. Under federal law, companies in Chapter 11 bankruptcy can terminate existing vendor contracts. Chrysler used this provision to weed out what it considered to be underperforming dealerships – about 800 of them – as part of its Chapter 11 filing. Dealers have petitioned Congress for relief, and Chrysler has reinstated a little over 10 percent of the dealerships to date.
Marchionne also noted that, “It would be remiss of me not to acknowledge that Chrysler Group owes a deep debt of gratitude to both taxpayers in Canada and the U.S. for the loans that have enabled a new and restructured company to take life. The government assistance, as we all know, was not universally popular.”
If your company is considering filing for Chapter 11 bankruptcy protection, contact our Jacksonville, Florida bankruptcy law firm.
Greg Gilbert
Keith Maynard
