The judge overseeing Chrysler’s bankruptcy has cleared GMAC to provide finance to Chrysler dealers and customers.
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The automaker’s own finance unit, Chrysler Financial, majority owned by Cerberus Capital Management, which provided financing to over 60% of dealers, almost entirely stopped lending after Chrysler filed for bankruptcy protection on 30 April, making it hard for dealers to obtain showroom stock, Reuters reported.
Judge Arthur Gonzalez approved a Chrysler motion requesting that GMAC, the former financing unit of General Motors, be allowed to step in and provide wholesale, retail and other product-related financing for an initial four years.
Documents finalising details of the deal were filed with the court in New York on Tuesday but are subject to review, the report noted.
Without the financing allowed by the judge, “the general dealer body would run through working capital immediately or within weeks,” a Chrysler official said in court.
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