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Thursday, 07 May 2009 10:43

Chrysler Starts Dealer Payments

Chrysler LLC began paying some of the hundreds of millions of dollars it owes its dealers on May 6, although some said they hadn't yet received payments.

The payments started after the U.S. Bankruptcy Court in Manhattan approved a request by Chrysler to spend $753 million to reimburse dealers for pricing discounts and other sales incentives. While several dealers reported money they were owed was deposited in their bank accounts, the owners of some smaller dealerships said their payments haven't arrived.

In court documents, Chrysler said it intended to withhold payments to dealers it doesn't plan to keep. As part of its reorganization, Chrysler aims to drop about 800 dealers, shrinking its network to about 2,400 stores from 3,200.

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