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Chrysler's Bankruptcy Comes to a Close

One of the most famous bankruptcy filings in recent memory has come to a close. Chrysler has completed the final $5 billion payment to the United Auto Workers Union and has now completed its Chapter 11.

Chrysler was forced into bankruptcy by President Obama in 2008 as way to save the distressed US automaker at the beginning of the recession.  The move was made in order to facilitate a purchase of the automaker by Italian automaker Fiat.

Last month, Fiat exercised its option to purchase the remaining 41.5 percent share that it did not own.  Fiat now owns Chrysler in full.

Chrysler, founded in 1925, has long been one of the icons of the American auto industry.  It was credited with introducing the first electronic fuel injection engine and transistor car radio in the 1950's.  The company was on the brink of bankruptcy in the late-1970's until Lee Iococa revived the company in the 1980's.

Chrysler was forced to file for Chapter 11 protection on April 30, 2009.  Chapter 11 is used for business reorganizations or personal debts exceeding $1 million when Chapter 7 is not an option.  The filing was required as part of the agreement that let Chrysler borrow significant loans from the United States to continue operating and to faciliate the sale to Fiat.

Fiat will now form a new company called Fiat Chrysler Automobiles NV.  Fiat has returned to the US auto scene in the last 2 years with an eye to an increasing presence now that the Chrysler purchase is complete.

Feel free to contact our office for a free bankruptcy initial consultation.

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