Cerberus Tries to Salvage What It Can From Chrysler

By LOUISE STORY
NYT

For Stephen A. Feinberg, the long road back from the most disastrous investment of his career — Chrysler L.L.C. — began last week around a polished wood table inside the Treasury Department.

It was not the road he had envisioned when his private investment firm, Cerberus Capital Management, bought Chrysler in the summer of 2007.

Back then, Mr. Feinberg was hailed as a hero — the Wall Street financier who just might save the American car industry. Instead, he lost billions for his investors and co-investors. And last week it became clear that he would lose Chrysler’s auto operations, as well.

So as the Obama administration prepared to assert control over Chrysler and General Motors, Mr. Feinberg flew to Washington to try to salvage what he could. In a midweek meeting with Treasury officials, Mr. Feinberg agreed to give up the 80.1 percent stake in Chrysler held by Cerberus and its co-investors, according to a person briefed on the negotiations. He first offered to do this last year.

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