Reuters: Chrysler will file Chapter 11 today
Reuters reports, quoting a senior administration official, Chrysler will file for protection under Chapter 11 bankruptcy. President Obama and the auto task force will discuss the automaker’s reorganization at noon (EST).
As of this morning, Chrysler and the U.S. Treasury had not been able to gain the necessary concessions from all of the company’s creditors, so Chrysler will reorganize under the protection of the courts.
“While the Administration was willing to give the holdouts a final opportunity to do the right thing, the agreement of all other key stakeholders ensured that no hedge fund could have a veto over Chrysler’s future success,” the official said.
“Their failure to act in either their own economic interest or the national interest does not diminish the accomplishments made by Chrysler, Fiat and its stakeholders nor will it impede the new opportunity Chrysler now has to restructure and emerge stronger going forward.”
Chrysler is also said to be close to finalizing its alliance with Fiat SpA. The concessions won from the UAW and CAW were key to clearing the way. An Italian newspaper had reported a deal was done but later retracted the comment when Fiat issued a denial.
