Chrysler May File for Bankruptcy Next Week

By Harry Kimball,  Newser Staff
Posted Apr 23, 2009 3:34 PM CDT
Chrysler Chief Executive Officer Robert Nardelli.   (AP Photo)
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(Newser) – Chrysler is preparing to file for bankruptcy as early as next week, the New York Times reports. The best-case scenario for survival: Chrysler will strike a deal with its lenders, file for bankruptcy protection to shed liabilities, then merge its strongest assets with Fiat. If those deals fall through, the company is looking at liquidation, the Wall Street Journal notes. The UAW has agreed in principle to the move and would emerge with a large stake in the company.

"In a negotiation like this, everything is speculation until there's a deal," said a US official. "It should surprise no one that the administration is planning on contingencies." Chrysler would be the first of Detroit's Big 3 to file for bankruptcy. GM—itself now in talks with Fiat for some kind of deal in Europe and Latin America—could follow suit in May, the Journal notes.