Old Carco's wind-down agreement, cash collateral use OK'd by court

By Lisa Kerner

Charlotte, N.C., Nov. 19 - Old Carco LLC, formerly Chrysler LLC, had its wind-down agreement and cash collateral use approved, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, Old Carco requested court approval to use cash collateral to liquidate its first-lien collateral and approval of the proposed funding for the wind-down of its business.

The company said its access to cash collateral under its debtor-in-possession financing order expired on July 3.

Old Carco said the U.S. Treasury has consented to the use of the liquidation funds to wind down the company's estates.

Wind-down agreement

Under the wind-down agreement:

• Old Carco can use the liquidation funds by maintaining or funding trust accounts;

• None of the liquidation funds will be used to fund activities solely related to the liquidation of any of the first-lien collateral;

• The company will administer and liquidate the DIP collateral;

• The DIP lenders will be entitled to any liquidation funds remaining after the company funds the trust accounts, any net proceeds from the sale of any of the DIP collateral, any liquidation funds remaining after the liquidation trust has been fully administered and any liquidation funds remaining after the conversion or dismissal of Old Carco's bankruptcy case;

• A total of 80% of the net proceeds from the liquidation of company cars will be paid to the first-lien agent and 20% will be paid to the company; and

• The first $3.6 million of the remaining car proceeds share will be paid to the DIP lenders to reimburse them for funding Daimler litigation costs, and the rest of the remaining share will be split, with 80% going to the DIP lenders and 20% to the company's unsecured creditors committee.

Chrysler, an Auburn Hills, Mich.-based automotive company, filed for bankruptcy on April 30, 2009. Its Chapter 11 case number is 09-50002.

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