Sale of Newark Chrysler plant approved

Detroit News noted that the Old Carco has been given permission to sell its Newark, Delaware assembly plant to the University of Delaware. The plant, which most recently made the Durango and Aspen, was one of the last of many Northeastern auto plants to close down. Chrysler Group purchased $25,000 of equipment from the plant before the sale, and had been paying taxes on the plant (which was assessed $5 million per year in property tax).

Old Carco is the “unwanted” portion of the old Chrysler LLC. The $24 million sale price for the plant will be used to administer the shutdown of Old Carco, and be distributed to creditors.

The University of Delaware will build a research and technology campus with the land, which is close to its sports fields, after Chrysler removes remaining equipment. It is expected to take two years to clean the site and remove the buildings.

Former Chrysler loses $344 million in July

Old Carco, LLC, the company formed to manage and liquidate the assets abandoned after the formation of Chrysler Group LLC, lost $344 million in July, according to a filing in New York bankruptcy court. It reported about $2 million in revenue, mostly from charges to the new Chrysler Group for operating facilities licensed to the new company.

The liquidation operation, headed by Ron Kolka, former chief financial officer of the bankrupt Chrysler LLC, has now lost $12.1 billion in value in three months and is in default on a $3.4 billion federal loan and a $57 million interest payment that came due in mid-August. Because of the default, the company can now no longer borrow.

As of the filing, Old Carco LLC had assets of $2.2 billion and liabilities of $20.6 billion meaning unsecured creditors are likely to receive just pennies on the dollar for their claims.

Indiana officials ask for second chance with Supreme Court

Officials of three Indiana funds have petitioned the U.S. Supreme Court to reconsider hearing their objections to bankruptcy court decisions that allowed Chrysler to be taken over by Italian automaker Fiat. The officials still maintain the sale unfairly favored certain unsecured stakeholders, like United Auto Workers, ahead of secured debtholders like the pension funds.

The Supreme Court declined to hear the appeal in June but made no decision on the plaintiffs’ arguments. The new petition, filed on Thursday, asks the Supreme Court to decide whether actions similar to those approved in Chrysler’s bankruptcy should be allowed in the future.

Old Chrysler defaults on government loans

Old Carco LLC defaulted on $3.34 billion in debtor-in-possession financing from the U.S. and Canadian governments in June. The company also missed a $29 million interest payment on the loan.

According to documents filed yesterday, the remnants of Chrysler that remained in bankruptcy had costs of $10.2 billion in June, more than the total assets with which the company was left to cover the costs of its liquidation.

The failure to make the payments due on June 30 caused the U.S. Treasury to send a notice of default to Old Carco on Aug. 13: the notice was reported in court documents filed yesterday. The notice means Old Carco LLC can no longer borrow against the roughly $1.5 billion remaining in the loan fund.

Old Carco continued to pay property and real estate taxes and other costs associated with the plants being leased to new Chrysler until their slated closure. Payroll costs were $142 million for June, and taxes on that were $58 million, including $1.8 million to Michigan. Old Carco also paid professional fees in June, including $15 million to financial consultants Capstone Advisory Group LLC.

Old Carco filed an unaudited financial report yesterday listing total assets of $2.345 billion and liabilities of $20.5 billion of of June 30 meaning Chrysler LLC’s many unsecured creditors have little hope of receiving any significant settlement.

Chrysler Group sues Daimler over contracts

Chrysler Group LLC has joined its unsecured creditors in suing its former owner Daimler AG. However, unlike the creditors, who are suing over Daimler’s alleged past misdeeds, Chrysler is suing because it claims Daimler is not honoring its contracts to supply Chrysler with components now.

The latest lawsuit was filed last Friday in U.S. Bankruptcy Court in New York City.

“Daimler’s conduct threatens to shut down Chrysler Group’s manufacture of key product lines,” according to Chrysler spokesman Gualberto Ranieri who noted Daimler’s actions could shut down production of the Grand Cherokee production at the Jefferson North assembly plant in Detroit and the Dodge Charger, Challenger and Chrysler 300 lines at the Brampton, Ontario plant.

Chrysler says Daimler is refusing to supply steering columns and torque converters, threatening production of new Chrysler vehicles. Daimler claims Chrysler owes it 55 million euros (more than $78.6 million) as compensation for the Detroit automaker’s failure to purchase an agreed-upon number of 2.2-liter diesel engines. In its Friday filing, Chrysler says the shortfall issue was resolved along with other disputes in an agreement made last April 17, before Chrysler LLC filed bankruptcy. The agreement was ratified later by the bankruptcy court.

Ranieri accused Daimler of extortion and said the German company’s conduct is in direct violation of the April 17 agreement.

Daimler spokeswoman Julia Engelhardt said the company rejects Chrysler’s claims, adding, “We believe these claims are without merit, and we will defend ourselves vigorously.”

Old Carco asks court to block dealer lawsuits

Old Carco, the company created to handle assets abandoned by Chrysler Group LLC when it exited bankruptcy, has asked the U.S. Bankruptcy Court in New York to stop lawsuits filed by eleven terminated dealerships. The dealerships are trying to sue to regain their franchises.

The motion, filed Tuesday, asserts the dealers are trying to do an “end run” around the court, which approved the terminations in May.

In the motion, the Jones Day law firm, which represents Old Carco, said: “These actions constitute an intentional and brazen attack on this court’s jurisdiction and authority.”

Chrysler is supporting the motion. In a a prepared statement, representatives for the automaker said: “Old Carco was forced to take this action as a result of the actions of the 11 dealers. By taking the actions noted in the motion, the rejected dealers have directly violated the orders of Judge Gonzalez and the bankruptcy court. Instead of appealing the sale and rejection orders in the proper bankruptcy court forum, they are seeking to do an end run on the court’s orders.”

A hearing on the motion has been set for August 27.

Dealers sue Chrysler

Eleven dealerships are currently trying to sue Chrysler Group, LLC, which has asked judge Arthur Gonzalez to block the suit, according to the Detroit News. The dealers are attempting to regain their franchises, saying that their state’s motor vehicles statutes outweigh the bankruptcy code. A hearing is scheduled for August 27.

The dealers are primarily from Wisconsin: Boucher Imports (Greenfield), Braeger (Milwaukee), Chilson (Eau Claire), Quaden Motors (Okauchee), Johnson Motors (St. Croix Falls), Lakeland Pontiac-GMC-Jeep (Oconomowoc), Mueller Chrysler of Oshkosh, and Wolf’s Motor Car of Plymouth are joined by Little Rock (AK)’s Crain CDJ, Elyria (OH)’s Spitzer Autoworld, and St. George’s (UT) Painter’s Sun Country Chrysler.

Boucher and Crain are parts of large dealerships groups.