Don’t worry, it’s going to a good cause….the UAW.
As we noted this morning, lawyers representing Chrysler said in court yesterday that the government would not be getting its $8 billion loans back, including about $4 billion in debtor-in-possession financing.
Well that news was so stunning — so obviously an admission that the bankruptcy itself is a bailout to the union — that we had a hard time believing it. But it’s totally true.
The administration confirmed the news to CNN:
Some of the main assumptions listed by Robert Manzo of Capstone Advisory Group were that the Treasury would forgive a $4 billion bridge loan given to Chrysler in the closing days of the Bush administration, a $300 million fee on that loan, and the $3.2 billion in financing approved last week by the Obama administration to fund Chrysler’s operations during bankruptcy.
An Obama administration official confirmed Tuesday that Chrysler won’t be repaying the loans. A portion of the bridge loan may be recovered by Treasury from the assets of Chrysler Financial, the former credit arm of the automaker which is essentially going out of business as part of the reorganization.