Former Chrysler's disclosure statement approved by bankruptcy court

By Lisa Kerner

Charlotte, N.C., Jan. 21 - Old Carco LLC's disclosure statement was approved by the U.S. Bankruptcy Court for the Southern District of New York, according to an attorney close to the case.

As previously reported, Old Carco said its plan of reorganization is based on the liquidation of the company's remaining assets, including collateral of the first-lien lenders and government debtor-in-possession lenders and the prosecution of an action against Daimler AG.

Liquidation proceeds and escrows created at the time of Chrysler's asset sale and funded by the U.S. and Canadian governments will be distributed to creditors.

The potential distribution for holders of general unsecured claims is contingent on a successful outcome in the lawsuit filed by the company's official committee of unsecured creditors against Daimler, according to the disclosure statement.

Old Carco, 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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