Business

RATTNER BLOWOUT

Steve Rattner is said to be in line to become the new White House car czar – but he faces a sticky conflict of interest surrounding a bitter $125 million fight with Chrysler’s owner.

The Wall Street titan surfaced yesterday as a leading candidate for a new government post to oversee the stalled auto industry and quarterback the billions of dollars that Uncle Sam is pouring into Detroit automakers.

President-elect Barack Obama is said to want the Wall Streeter for the post, according to ABC News. Rattner didn’t return calls for comment.

The successful dealmaker, who raised $100,000 for Obama’s election, heads the investment firm Quadrangle, which is embroiled in a standoff over a soured acquisition deal with financial giant Cerberus, owner of Chrysler.

Cerberus also would have to answer to the new car czar for the billions Chrysler’s taking in rescue aid.

Cerberus recently notified Rattner and his group that they’re in technical default of terms to repay a $125 million loan that he used to bankroll his $250 million purchase, two years ago, of sexy lad magazine Maxim and pop-music magazine Blender.

“It’s crazy,” said one surprised source familiar with the money squabble.

“Cerberus is about to foreclose on the loan to Quadrangle, and now Steve Rattner is going to be the boss of Cerberus,” the source said.

Rattner is struggling with the media operations of his financial group with magazine-advertising revenue plunging as much as 29 percent.

Cerberus wanted him to put up more equity to cover debt levels, but Rattner refused, causing Cerberus to declare Quadrangle in technical default of its debt covenants.

Quadrangle has suffered several setbacks in the economic downturn. It recently began unwinding its separate $500 million hedge fund as investors deserted. It also faced upheavals at some of its properties, including Spanish cable giant Grupo Corporativo Ono, which cut staff by 30 percent and booted its founder.

Before starting his own firm, Rattner was hailed as the king of media deals on Wall Street, rising quickly through the ranks of Lehman Brothers, Morgan Stanley and Lazard.

Rattner had been a major fund-raiser for Sen. Hillary Clinton (D-NY) but switched to Obama when the tide began turning in the Democratic presidential race.

keith.kelly@nypost.com