BREAKING: Obama to Announce Chrysler Bankruptcy Tomorrow Morning

[thebobman]

FULL STORY @ BLOOMBERG.NET

Obama Said to Plan for Chrysler Bankruptcy, Alliance
By Mike Ramsey and Christopher Scinta
April 29 (Bloomberg)

-- President Barack Obama aims to announce tomorrow that Chrysler LLC will be placed into Chapter 11 bankruptcy, leading to an alliance with Italian automaker Fiat SpA, people involved in the matter said.

Administration officials are still resolving outstanding issues, and the plan isn’t finished, said one of the people, who declined to be named because discussions are private.

As part of negotiations, the U.S. Treasury raised its offer to Chrysler’s lenders to $2.25 billion in cash to forgive $6.9 billion in secured debt, two other people familiar with the matter said. The previous offer had been for $2 billion in cash.

Any bankruptcy filing may come as soon as tomorrow, people familiar with that matter said. Chrysler’s best assets would be sold to a new entity that would have an ownership structure similar to that envisioned in an out-of-court deal between the Auburn Hills, Michigan-based automaker and Fiat, based in Turin, Italy, the people said.

The Italian company would become a 20 percent owner of Chrysler, and a union retiree health-care trust fund would hold 55 percent, with the rest of the company staying in the government’s hands initially, the people said.

Fiat and the new board of directors of the company would pick a chief executive officer and chairman, said current CEO Robert Nardelli in a memo to workers on Feb. 17. Fiat’s chief, Sergio Marchionne, said in an April 15 interview that he would be willing to run Chrysler if asked.

I'd hate to be a parts supplier for Chrysler right about now... Only a matter of time before before GM follows suit. I'd be willing to be that this was the plan all along since the original bailout; government controlled bankruptcy allows Chrysler to wriggle their way out of enormous sums of debt (it would similarly benefit GM) and both companies have become too bureaucratically huge to be directly confronted by anybody other than the federal government.

Let's hope this isn't the first of the dominoes folks

[thebobman]

CONFIRMED:
Chrysler Files for Chapter 11 Bankruptcy:
http://www.thedetroitbureau.com/2009...t-partnership/

[oddmud]

They aren't closing down, and really people will still need parts. :) Think about it.