These are some tough times for Chrysler as everything points to a bankruptcy. The company was hoping that the US Treasury Department would reach an agreement with the lenders of the car manufacturer, however, the negotiations were stalled and then broken down. Chrysler will now file bankruptcy under Chapter 11 protection, and they will be hoping for a quick resolution to the matter.
I must admit that I didn’t think that it will all get down to this, however, the US Treasury Department seemed to almost not “care” about Chrysler, and they only raised their offer with $250 million to take it to $2.25 billion. I remind you that Chrysler has a debt of $6.9 billion, and the US Treasury Department should have offered lenders at least $2.80bn, but it seems like it’s too late now.
Although the Obama administration said that they won’t let Chrysler go into bankruptcy, their debt is too high and the lenders rejected the US offer from the Treasury to reduce the carmaker’s debt. This was the most difficult obstacle for Chrysler as they already met the Government’s deadline to restructure the company. Chrysler did everything necessary, however, the lenders were merciless.
Chrysler might be saved by Fiat. Chrysler must get an approval from the United Auto Workers union in order to complete a deal with the Italian carmaker today or tomorrow. We will hear more in the next few hours if Chrysler will indeed file for bankruptcy.
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