In another bankruptcy court filing, Chrysler CEO Bob Nardelli revealed that despite its fire-sale price, no serious offers were made for the Viper brand.
Chrysler's 392,000-square-foot Viper plant in Detroit was being offered for just $10 million, but Chrysler said it received "no purchaser interest," according to the filing by Nardelli. The CEO said the Viper brand's failed sale is an example of how the assets of the company are limited in value.
"There is the objector's notion that it would be a simple matter for us to sell off select product lines, such as Jeep, that might allow a recovery above $2 billion," Nardelli said. "The market for such assets is extremely depressed at this time."
The objecting creditors have moved to stop Chrysler's sale of its "good" assets to a new company partially owned by Fiat, claiming that if the company were broken up and sold instead, they would have a better chance of recouping their losses. Nardelli says the objectors aren't facing reality.
The objecting bondholders "simply ignore the fact that the U.S. Treasury Department was the only lender willing to invest in us. As credit markets tightened and automotive sales deteriorated in the fall of 2008, Chrysler suffered a sever liquidity crisis. We were unable to obtain financing from banks or other traditional sources. As a result, and as a last resort, Chrysler approached the United States government for financial support."
Nardelli also defended the decision to sell Chrysler's assets to Fiat.
"Based on my management team's expertise and business acumen, the work product of our advisors (which included a fairness opinion and liquidation analysis), and the notion and hope that Chrysler could continue and perhaps return to profitability, we chose the sale over liquidation," Nardelli said.
According to the Detroit Free Press, the Viper business netted Chrysler $16 million before taxes, interest and depreciation in 2008. Chrysler says it did receive an offer from Devon Motor Works to buy the Viper business and lease the Detroit plant for a year, but it is trying to verify that the company has access to financing.
Source: The Detroit Bureau, The Detroit Free Press