DealBook: Even With Lifeline, Can Chrysler Survive?

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Edited by Andrew Ross Sorkin

TODAY'S TOP HEADLINES | Thursday, December 11, 2008 M & A: A.I.G. Chief Says Asset Sales May Be Delayed BANKING: Topics From Banker Awards Live On PRIVATE EQUITY: Deal for Bell Canada Collapses HEDGE FUNDS: Hedge Fund Raises the Pressure on Orthofix OFFERINGS: A-B InBev Raises $8 Billion in New Shares VENTURE CAPITAL: Recession? Accel Raises $1 Billion LEGAL: Blunt Advice for Treasury on Progress of the Bailout TOP STORY Even With Lifeline, Can Chrysler Survive? The House voted on Wednesday to approve a $14 billion government rescue of the American automobile industry. However, the bailout plan, which would provide emergency loans to General Motors and Chrysler, was in jeopardy because of strong Republican opposition in the Senate. Go to Article from The New York Times» Go to House Roll Call on Bailout Plan via The New York Times» Meanwhile, a forecasting firm on Wednesday expressed doubt about Chrysler's ability to survive in the long term, even with a federal lifeline. The firm, CSM Worldwide, said that while G.M. and Ford have viable reorganization plans in place -- provided Congress authorizes billions of dollars in loans -- Chrysler's demise is all but inevitable regardless of whether it receives government aid. A sale of Chrysler's individual brands, such as Jeep, may be the only remaining option, CSM said. Go to Article from The New York Times» Go to Article from The Detroit Free Press» Read More Add a comment ADVERTISEMENT Back to Top MERGERS & ACQUISITIONS The chief executive of U.S. insurer American International Group, which is looking to shed assets around the globe as part of a $152 billion U.S. government rescue package, said that difficult markets may delay the sale plans, though certain units have attracted heavy interest. Go to Article from Reuters via The New York Times» Read More Add a comment XL Capital's shares fell as much as 50 percent after Bloomberg News, citing four unidentified people with knowledge of the matter, reported that the company had hired Goldman Sachs to gauge interest among potential bidders. Go to Article from Bloomberg News» Read More Add a comment Nearly one year later, one of the most prominent critics of Rupert Murdoch's takeover of Dow Jones has changed his mind. At least, for now. Go to Article from The Daily Beast» Read More Add a comment The federal government must create strategies to eventually dilute its involvement with private enterprise, Securities Exchange Commission Chairman Christopher Cox wrote in an opinion piece published in The Wall Street Journal. Go to Op-Ed from The Wall Street Journal» Go to Article from Reuters via The New York Times» Read More Add a comment Yahoo's shares climbed Wednesday after a big shareholder in the Internet company, Ivory Investment Management, urged it to sell its search business to Microsoft. Go to Item from DealBook» Go to Statement and Letter from Ivory Investment via PRNewswire» Read More Add a comment The Federal Trade Commission has removed the last regulatory hurdle for Verizon Wireless's acquisition of the Alltel Corporation, in a deal that will create the country's largest wireless carrier. Go to Article from The Associated Press via The New York Times» Read More Add a comment Lenovo Group said Thursday it is discussing possible acquisitions, but the Chinese personal computer maker refused to confirm reports it is bidding for Brazil's biggest PC manufacturer. Go to Article from The Associated Press via The New York Times» Go to Press Release from Lenovo (PDF)» Read More Add a comment Emotive Communications, an interactive ringtone developer, has snapped up mobile game firm Sennari Entertainment, with a little help from venture backer Mayfield Fund. Go to Article from The Deal» Read More Add a comment Back to Top INVESTMENT BANKING It's been a few days since American Banker's Banker of the Year Awards were handed out. But the topics discussed at the black-tie gala, held at the Plaza in midtown Manhattan, are still very much on people's minds. See photos of the event on DealBook. Go to Item from DealBook» Read More Add a comment Goldman Sachs will change its retirement rules in a way that will encourage some long-serving employees to leave by year-end, which may add to its existing workforce reductions, The Financial Times reported. Go to Article from The Financial Times» Go to Article from Reuters via The New York Times» Read More Add a comment An overwhelming majority of Americans -- 76 percent -- believe financial companies that received money in the federal government's banking bailout should cancel bonuses for all employees this year, according to a new poll by Bloomberg News and The Los Angeles Times. Go to Article from Bloomberg News» Read More Add a comment Did John A. Thain, the chief executive of Merrill Lynch, really deserve a bonus this year? That question has caused quite a ruckus over the last few days -- especially on CNBC. Go to Item from DealBook» Go to Video from CNBC» Read More Add a comment JPMorgan Chase, Bank of America and Goldman Sachs are poised to become the three dominant investment banks after the global financial crisis caused a shakeout in the industry, according to a report by Greenwich Associates, a consulting and research firm. Go to Item from DealBook» Read More Add a comment American banks have steadily increased their inventory of hard-to-value assets, or level three assets, with the biggest institutions holding $610 billion of them in the third quarter, The Financial Times reported. Go to Article from The Financial Times» Go to Item from Naked Capitalism» Read More Add a comment A French government holding company carried out on Thursday a 10.5 billion euro ($13.6 billion) capital injection for the country's six largest banks, aimed at assuring financial stability and supporting lending to the battered economy. Go to Article from The Associated Press via The New York Times» Go to Press Release from the French Finance Ministry (In French)» Read More Add a comment Asian banks have survived so far without massive bailouts, and some are even expanding, but they will be tested in the months ahead. Go to Article from The Associated Press via The New York Times» Read More Add a comment Back to Top PRIVATE EQUITY The $50 billion takeover of Bell Canada, the largest leveraged buyout in history, collapsed late Wednesday night, drawing a curtain to the end of blockbuster private equity deals. Go to Article from The New York Times» Go to Private Equity Firms' Press Release via Business Wire» Read More Add a comment Cerberus Capital Management, the private investment firm that controls GMAC and owns Chrysler, raised the specter of bankruptcy to apply pressure to GMAC's bondholders to go along with a bond-exchange plan that many of them have been resisting. Go to Article from The New York Times» Go to Item from DealBook» Go to GMAC News Release via PRNewswire» Read More Add a comment Mistakes made by Apollo Management and Cerberus Capital Management during the leverage boom may put an end to their buyout adventures, Breakingviews says. Go to Article from Breakingviews» Read More Add a comment Back to Top HEDGE FUNDS Ramius, the activist hedge fund, made good on its threat to wage a proxy fight at Orthofix International, filing a preliminary consent solicitation that allows it to round up other shareholders seeking to replace board members. Go to Item from DealBook» Read More Add a comment Connecticut's investment advisory council gave the green light to a plan to invest in hedge funds, even after market turmoil wiped out $5 billion of pension assets. Go to Article from Bloomberg News» Read More Add a comment Elan's board is under fire from some large shareholders urging it to increase its oversight over what they consider a lax approach to cost-cutting and corporate governance, including the chief executive's ties to a hedge fund. Go to Article from Reuters via The New York Times» Read More Add a comment Back to Top I.P.O. / OFFERING Anheuser-Busch InBev, the world's largest brewer, said Thursday its investors had bought up nearly all the 6.4 billion euros ($8.27 billion) in new shares it sold to pay for the takeover that formed it last month. Go to Article from The Associated Press via The New York Times» Go to Press Release from Inbev» Read More Add a comment The prospect of the Federal Reserve issuing its own bonds now that the U.S. Treasury has stopped borrowing on its behalf could, paradoxically, make the world a riskier place, Breakingviews argues. Go to Article from The New York Times» Read More Add a comment Shares on Wall Street managed a gain on Wednesday after an up-and-down session, as investors continued to flock to the safest possible investments and Washington tried to put the final touches on a financial rescue package for Detroit's automakers. Go to Article from The New York Times» Read More Add a comment Stocks fell Thursday in Europe following a mixed session in Asia, as more central banks aggressively cut interest rates, maintaining the global momentum toward lower borrowing costs. Go to Article from The New York Times» Read More Add a comment Back to Top VENTURE CAPITAL Accel Partners, the Palo Alto, Calif., venture capital firm behind companies such as Facebook, Glam Media and MetroPCS, announced Thursday that it has raised two new funds for a total of $1 billion. Go to Item from Bits» Read More Add a comment This has been a gut-wrenching first year in business for three entrepreneurs whose start-ups were profiled in Brent Bowers's In The Hunt column in The New York Times last December. Go to Article from The New York Times» Go to Previous Item from The New York Times» Read More Add a comment A New York couple is betting on the idea that at least one thing is recession-proof: demand for a convenient and clean public toilet. Go to Item from Bits» Read More Add a comment Back to Top LEGAL Congressional lawmakers gave the Treasury Department two pieces of advice on Wednesday about the nation's financial rescue plan: First, follow the money. Second, fight more aggressively against the rising tide of home foreclosures. Go to Article from The New York Times» Neel Kashkari, the assistant Treasury secretary serving as the interim chief of the bailout operation, testified on the plan's progress and fielded some tough questions from lawmakers. Go to Item from DealBook» Go to Mr. Kashkari's Testimony via the Treasury Department» Go to Previous Article from The New York Times» Read More Add a comment A little-noticed provision in the proposed bailout plan for Detroit's automakers blesses an aggressive tax shelter sold by large banks and insurers to municipal transit agencies across the country. Go to Article from The New York Times» Read More Add a comment American International Group, the giant insurer bailed out by the U.S. government, is trying to figure out how to unwind derivatives contracts that cover nearly $10 billion in trades, without asking taxpayers for more money. Go to Article from Reuters via The New York Times» Go to Previous Item from DealBook» Read More Add a comment Yahoo said Wednesday that it had amended a controversial "poison pill" severance plan as part of its settlement of a lawsuit filed by two institutional shareholders. Go to Item from Bits» Read More Add a comment Shares in Nortel Networks plunged 23 percent on Wednesday after reports that the long-troubled telephone equipment maker has hired advisers to assess its options, including a potential bankruptcy. Go to Item from DealBook» Read More Add a comment Debevoise & Plimpton has become the latest white-shoe New York law firm to slash bonuses for its associates. Read the internal memo on DealBook. Go to Item from DealBook» Read More Add a comment A bankruptcy judge in Delaware allowed the Tribune Company on Wednesday to make $74 million in payments to employees, vendors and others as it works through a Chapter 11 reorganization. Go to Article from The Associated Press via The New York Times» Read More Add a comment Get home delivery of The New York Times for as low as $3.15 a week.

SEARCH DEALBOOK SITE DealBook | E-mail Preferences Help | Advertising Opportunities Apollo and Cerberus buyout units look endangered December 10, 2008 Fed-issued bonds would make world riskier December 10, 2008 Sarin would tick important boxes for Yahoo December 10, 2008 Blagojevich and the Tribune Angle Tribune and its attempts to sell Wrigley Field figure prominently in the indictment of Illinois's governor. More» Workers Pay for Tribune Debacle Sam Zell literally mortgaged the future of Tribune's employees to close his ill-fated buyout deal. More» Rescue Memo to Vikram Pandit Jack Flack says that Citigroup's chief executive needs to stop surviving and start leading. More» Video: Chrysler's Plea Robert Nardelli, the chairman of Chrysler, urged members of the Senate Banking Committee to approve federal aid for his company. More» What's a Wall Street Chief Worth? With taxpayers' money on the line, creating packages that pay enough -- but not too much -- becomes an even thornier problem. More» Tracking the Bailout The New York Times tracks how the $700 billion Troubled Asset Relief Program is being doled out to banks, insurance companies and more. More» The Deal Professor A blog-within-a-blog that looks at mergers, private equity and corporate governance through a legal lens, written by Steven M. Davidoff, a professor at the University of Connecticut School of Law and a former lawyer at Shearman & Sterling. More» Revolving Door The latest hires, promotions and departures at Kirkland & Ellis, Fannie Mae, BlackRock and more. More» The Rescue Squad DealBook's special section looks at the people reshaping Wall Street and what the new landscape might look like. More» Lehman's Fall Full coverage of Lehman Brothers' dramatic slide into bankruptcy protection. More» The Bear Bailout Full coverage of the proposed takeover of the troubled investment bank -- and the crisis that led to the sale. More» DealBook for BlackBerry Get one-click access to DealBook to read the latest deal news throughout the day. Visit mobile.nytimes.com/bbinstall directly from your BlackBerry or by sending the text message "db install" to 698698. More information on DealBook for BlackBerry. News By Industry Airlines / Autos Basic Industries Consumer Goods Energy / Utilities Financial Services Food & Beverage Healthcare Media Real Estate Retail / Leisure Technology Telecom Tools & Resources GET QUOTES Look Up Symbol RESEARCH SUITE Portfolio Company Research U.S. Markets International Markets Mutual Funds SEND A TIP OR FEEDBACK E-mail us at dealbook@nytimes.com Dealboard

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