U.S. Taxpayers won't be getting back billions of dollars loaned to Chrysler to keep the struggling company afloat in a recessed auto market, according to several media sources. CNN Money reports, "Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing. This revelation was buried within Chrysler's bankruptcy filings last week and confirmed by the Obama administration Tuesday."

The filings include a list of "business assumptions" guiding the company's reorganization. One of those assumptions, CNN reports, was that "the Treasury would forgive a $4 billion bridge loan given to Chrysler in the closing days of the Bush administration, a $300 million fee on that loan, and the $3.2 billion in financing approved last week by the Obama administration to fund Chrysler's operations during bankruptcy."

The Detroit News adds, "In court papers fielded last week, Chrysler said it expects the U.S. Treasury to forgive the $4 billion loan made in January. A senior Obama administration official didn't dispute that assessment."

The Obama administration has promised Chrysler as much as $6 billion in additional financing if the automaker successfully negotiates a merger with Italian automaker Fiat. Prospects for repayment of that loan may be somewhat better. Automobile Magazine notes, "Fiat is required to pay back the $6 billion loan if it wants to take majority control of Chrysler." The Italian company will initially take a 20 percent stake in Chrysler, but have "the opportunity to increase that stake by increments of 5 percent each time it meets a goal set by the administration.  Three goals have been set total, meaning Fiat can retain a 35 percent stake in Chrysler without the repayment of any loans.  To achieve more than 35 percent, however, the $6 billion must be repaid."

A Chrysler-Fiat deal moved closer to fruition late yesterday, Bloomberg reports, when the Detroit-based automaker "won bankruptcy court approval to auction most of its assets by May 27 with an offer from Italy's Fiat SpA as the lead bid in a deal that would create the world's sixth-largest automaker," it was over objections from some lenders who hold Chrysler's debt.

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