Chrysler battling bankruptcy rumors

In what was bound to happen over a period of time, rumors have swirled since Chrysler exercised its 2 billion dollar line of credit from Cerberus Capital Management LP and Daimler AG this week. The rumors have been so persistent that Chrysler has even stepped forward to deny that they are in danger of going into bankruptcy.

According to the automaker, the exercising of the LOC was due to the agreement in Cerberus' 80 percent stake in the company, that Chrysler had to do this prior to August 3rd. While of course that can be spun any and every which way, the fact is that any financial move a car maker is bound to make over the next several months will have eyebrows raised as to the "underlying" factors as to what is motivating such moves.

Do I think that Chrysler is in that bad of shape? Well, it ain't good, that's for sure, but to have the bankruptcy pink elephant in the room is a bit premature, in my opinion. These companies have had situations where they have been down in the dumps before, and while I will agree that the uncertainty now is probably more panicky than ever, I know that with the venture capitalists of the world that somehow, some way, they will survive in the long run.

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Chrysler battling bankruptcy rumors

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