Chrysler to ally with Fiat, file bankruptcy

The Wall Street Journal is reporting that Chrysler and Fiat will complete an alliance today that will include the Detroit automaker filing for Chapter 11 bankruptcy as part of the restructuring plan.

While key labor agreements were ratified and Chrysler’s four major creditors had agreed to a reduction in Chrysler’s debt, negotiations with Chrysler’s other creditors, including several hedge funds, broke down late Wednesday, making a bankruptcy filing all but inevitable. Treasury officials believe that the bankruptcy proceedings could be completed in a matter of weeks.