Rumor has it, Cerberus sees Chrysler as being worth more as a write-off than as an investment:
Meanwhile, Chrysler is understood to have retained a law firm that specialises in bankruptcy proceedings to begin a liquidation process if Congress does not agree to lend the money it needs to survive.Cerberus doesn't need government money to keep Chrysler afloat. It needs government money to avoid taking a loss on what turned out to be a bad investment.
I would offer Chrysler loans on one of two conditions:That, of course, is exactly what they're asking.
If they are asking that this money be loaned to Chrysler Holdings LLC, with no recourse against Cerberus itself, I would tell them to kiss off.
Cerberus first sells Chrysler to a publicly traded firm, divesting itself of any and all interest in Chrysler (and yes, this still works as a subsidy to Cerberus, as it will increase the selling price); or
Cerberus guarantees the money Chrysler borrows, putting up its portfolio of investments as security.