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US Treasury pumps extra $757 million into Chrysler

Latest update : 2009-05-27

The US Treasury has provided an extra 757 millions dollars to Chrysler as part of efforts to give the ailing carmaker a fresh start in partnership with Italy's Fiat. On Tuesday, a US court rejected a move to block Chrysler's bankruptcy filing.

AFP - The US Treasury said late Tuesday it had provided another 757 million dollars to troubled US automaker Chrysler, which has filed for bankruptcy.

The payment, dated May 20th, was made public in the latest transactions report on the use of the 700-billion-dollar Troubled Asset Relief Program (TARP), a financial stability plan voted by Congress in October.

As part of its efforts to revamp the US auto industry, the government has provided a total of 8.58 billion dollars between January and May to Chrysler Holding, before its bankruptcy filing on April 30, and to Chrysler, after the bankruptcy filing.

The Treasury also loaned 1.5 billion dollars in January to Chrysler Financial Services, the automaker's lending arm.

Chrysler cleared one hurdle to its fast-track bankruptcy plan Tuesday as a judge rejected an effort to derail the process.

US District Judge Thomas Griesa refused to take the matter away from the bankruptcy court, dismissing a challenge from Indiana's state treasurer who had argued that the Chrysler plan violates investor and creditor rights.

The ruling in a New York federal court means a hearing will proceed Wednesday before a bankruptcy court judge overseeing the Chrysler case, clearing the way for a quick sale of Chrysler's main assets to a new entity as early as Friday.

Any delay would have been a major setback for Chrysler and the administration of President Barack Obama, which aims for a rapid bankruptcy exit to allow Chrysler to get a fresh start in partnership with Italy's Fiat, and helped by emergency government loans.
 

Date created : 2009-05-27