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Report: Chrysler Financial Rejects $750 Million Fed Loan

A new report from the U.S. Treasury states that Chrysler Financial turned down a $750 million federal loan after failing to obtain waivers from top executives that would have set strict limits for their compensation. The captive lender denied the claim, saying negotiations never reached the point at which the waivers were required.

by Staff
April 22, 2009
2 min to read


FARMINGTON HILLS, Mich. — A new report from the U.S. Treasury states that Chrysler Financial turned down a $750 million federal loan after failing to obtain waivers from top executives that would have set strict limits for their compensation. The captive lender denied the claim, saying negotiations never reached the point at which the waivers were required.

"Chrysler Financial has determined that it has adequate private capital funding to cover the short-term needs of our dealers and customers and as such, no additional TARP funding is necessary at this time," the company told The Detroit News. "As such, executives have not been presented with any new demands with regard to executive compensation."

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The 250-page report, generated by the office of the official overseeing the Troubled Asset Relief Program, included passages which pinned the $750 million loan to "waivers from the top 25 Chrysler Financial executives that would have waived legal claims against Treasury and Chrysler Financial resulting from the recent changes in executive compensation requirements for TARP recipients." It went on to state that Chrysler Financial's management "informed Treasury that it was unable to obtain waivers from all 25 executives, therefore the request for additional funding was denied."

On Wednesday, Chrysler LLC learned that the Obama administration would set aside $500 million to aid the OEM as it negotiates a potential merger with Italian automaker Fiat.

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