Chrysler opponents: Chrysler is worth over $30 billion

A new core argument of the Chrysler opponents, led by White & Case’s Glenn Kurtz, has now surfaced. Earlier, the legal argument was that the bankruptcy proceedings were improper because the White House was involved as a lender, which Kurtz claimed was unconstitutional. A new argument is that the UAW’s VEBA will be taking a stake in the new company worth $24 billion. This valuation is based on Fiat’s stated contribution of $6.9 billion in “value,” with regard to engineering and designs that will be shared. This figure is based on engineering that Chrysler would avoid by linking with Fiat, not by any actual investment; Fiat is not investing significant amounts of cash into Chrysler.

Kurtz, neatly, has avoided the net worth of Chrysler that could be calculated by Daimler’s valuation of its former 19.9% stake: nothing.

The VEBA is owed around $12 billion by Chrysler.

Testimony also revealed that Indiana only paid 38 cents on the dollar for its Chrysler debt. It will be receiving 29 cents on the dollar.

Chrysler’s lead attorney pointed out that, while Kurtz appears to believe that Indiana would fare better in a liquidation, White & Case and Indiana have provided no evidence or scenarios in which that would be possible. One analyst suggested that Kurtz’s suggestions were a side-show intended to grab headlines and discredit Barack Obama’s support of Chrysler, by making it appear that the automaker’s rescue was political payback to the UAW.

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