Report: U.S. Treasury preparing for a Chapter 11 bankruptcy for Chrysler

Posted: Apr 23, 2009
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According to people with “direct knowledge” of the matter, the U.S. Treasury Department is preparing for a Chapter 11 bankruptcy filing for Chrysler as the automaker continues to work out concessions with the UAW, CAW and its lenders in an effort to follow through with partnership with Fiat.

It is reported that Fiat would continue to complete its alliance with Chrysler while the automaker is under bankruptcy protection.

Sources said that the Treasury has an agreement with the UAW which will protect worker pensions, retiree health care and benefits as a condition of the bankruptcy filing.

However, it is still unclear what will happen with Chrysler’s lenders who currently hold $6.9 billion in company debt. The U.S. government has made an offer which would give lenders $1.5 billion and a 5 percent stake in the new Chrysler/Fiat partnership.

Earlier this week, lenders proposed forgiving $2.5 billion in exchange for a 40 percent stake in the new Fiat and Chrysler alliance.

- By: The Daily Auto Editor

Source: New York Times


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  • zermatt

    I expect a Chapter 7 filing.

  • GMfan87

    you think? doesnt that require liquidating all assets?

  • zermatt

    From what I have read, the administration has decided that if Fiat doesn't close this deal that Chrysler doesn't have what it takes to go it alone.

    It is all up to Fiat and I am beginning to think that they are hedging their bets and are looking at Opel as an alternative.

  • gekke henkie

    Quote: 'It is all up to Fiat'. Since Fiat's CEO said that there would be no deal as long as the CAW won't give in, it is more up to the CAW if you ask me. But then again, noboby asks me, thankfully :)

  • Pat

    CAW is such a pain in the effing a-hole. not to mention so is our UAW. however, sergio definitely has what it takes to turn this company around…look at what he's done with Fiat

  • Ivan Gutierrez

    Where is Bob Marley?

  • zermatt

    I expect a Chapter 7 filing.

  • GMfan87

    you think? doesnt that require liquidating all assets?

  • zermatt

    From what I have read, the administration has decided that if Fiat doesn't close this deal that Chrysler doesn't have what it takes to go it alone.

    It is all up to Fiat and I am beginning to think that they are hedging their bets and are looking at Opel as an alternative.

  • gekke henkie

    Quote: 'It is all up to Fiat'. Since Fiat's CEO said that there would be no deal as long as the CAW won't give in, it is more up to the CAW if you ask me. But then again, noboby asks me, thankfully :)

  • Pat

    CAW is such a pain in the effing a-hole. not to mention so is our UAW. however, sergio definitely has what it takes to turn this company around…look at what he's done with Fiat

  • Ivan Gutierrez

    Where is Bob Marley?