Former Chrysler's liquidation plan confirmed by bankruptcy court

By Lisa Kerner

Charlotte, N.C., April 20 - Old Carco LLC's plan of liquidation was confirmed by the U.S. Bankruptcy Court for the Southern District of New York at a hearing on Tuesday, according to an attorney close to the case.

As previously reported, the plan was accepted by a majority of voting creditors.

The company's disclosure statement was approved in January.

Old Carco said previously that its plan 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.

Creditor treatment

In December Old Carco said treatment of creditors will include:

• Holders of priority claims will be paid in full in cash;

• Holders of first-lien secured claims will either receive cash from the net proceeds of the sale of the first-lien collateral, or the first-lien collateral will be transferred to the collateral agent for the benefit of these claimants;

• Holders of TARP financing secured claims, pre-bankruptcy intercompany claims and equity interests of Old Carco will receive no distribution;

• Holders of other secured claims will either be paid in full in cash, retain their liens and receive net cash proceeds from the sale of the collateral securing the claims or receive the collateral securing the claim; and

• Holders of general unsecured claims will receive a distribution of any proceeds from the Daimler litigation only if general unsecured creditors and first-lien creditors vote to accept the plan and only if the available net Daimler litigation proceeds exceed a $25 million minimum threshold.

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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