Cerberus seeks suckers for money-losing Chrysler

Cerberus Capital Management LP denied reports Monday that it had sold equity stakes in Chrysler LLC or GMAC — but didn't deny it had sought new money from its investors. The Financial Times had reported that Cerberus sold more than half of its equity stake in the two companies for more than $1 billion to 90 outside investors.

"Cerberus has not reduced or made any changes to its equity stakes in GMAC or Chrysler since the closing of either transaction," said a Cerberus statement released Monday. "Cerberus continues to have voting control over both investments. It is common knowledge, and has been widely reported, that Cerberus made these investments side-by-side with its co-investors at the time of closing. Our commitment to these companies has not changed."

Chrysler chairman and CEO Robert Nardelli said on May 23 that Cerberus wasn't backing away from its significant investments in Chrysler and the auto sector — despite the past year's rapid deterioration in auto sales and consumer confidence.

"We've got a great relationship," Nardelli said, noting that Cerberus still entrusted day-to-day responsibility for Chrysler to him and his co-presidents, Jim Press and Tom Lasorda.

"Any strategic alternatives are being handled by (Cerberus.) I'm not distracted," Nardelli said.

The Financial Times reported that Cerberus recently invited about 50 hedge funds to its Park Avenue office in New York for a presentation by its chief administrative officer, Seth Plattus, fueling speculation that the company was seeking new capital. Chrysler officials on Monday referred questions to Cerberus. Detroit News

[Editor's Note: Who will be the next series of investors lured in to fund the continuing losses at Chrysler?]