Lots of people seemed to think it was a good idea in May 2007 when $24 billion, New York–based hedge fund and private equity firm Cerberus Capital Management led a consortium of investors in buying an 80.1 percent stake in the smallest of the big three Detroit automakers.
The move was “hailed at the time for returning Chrysler to U.S. control,” lawyers representing some of the company’s lenders recalled two years later in a May...