Banks, Treasury Play Chicken on Chrysler Deal

Treasury blinks in standoff that will determine auto maker's future

(NEWSER) - The Treasury Department is offering banks holding Chrysler's debt a better deal in the latest round of the back-and-forth over the automaker's future, the Wall Street Journal reports. The counter offer—still way short of what the banks seek—proposes to give lenders 22% of the $6.9 billion Chrysler owes, plus a 5% stake in company. More»

Lawmakers say rescued banks should cooperate in auto rescue plan

(NEWSER) - Auto task force Steven Rattner's request that four big banks write off their $7 billion debt to Chrysler in return for nothing met with a big no from dropped jaws, reports the Washington Post. JPMorgan Chase, Morgan Stanley, Citigroup, and Goldman Sachs are seeking a better deal, but critics argue that the banks rescued by the government should now help the government rescue Chrysler. More»

Obama administration will not rule out Chapter 11 for ailing autos

(NEWSER) - Treasury advisers are working to line up $40 billion in financing for General Motors and Chrysler—5 times the size of any previous bankruptcy loan—just in case the two automakers need it, the Wall Street Journal reports. While efforts continue to restructure the companies by other means, the administration is speaking to as many as 70 lenders—including Citigroup and JPMorgan, themselves recipients of bailout cash—to provide government-backstopped financing for operations during a Chapter 11 restructuring. More»

(NEWSER) - President Obama said today that Chrysler’s impending bankruptcy is “not a sign of weakness but one more step” towards recovery, the Washington Post reports. The 1-to-2 month “surgical” bankruptcy—a time frame met with skepticism by experts—will give the automaker a “new lease on life,” Obama said. The president claimed that the filing and a partnership with Fiat would save “tens of thousands” of jobs. More»

(NEWSER) - Chrysler isn’t facing imminent bankruptcy, its vice chairman told the automaker’s dealers today. “Nothing has changed,” Jim Press said on a conference call, three participants tell the Wall Street Journal. Chrysler still plans to restructure outside of bankruptcy and cut a deal with Fiat. But Press did say that, should Chrysler not get concessions it needs, bankruptcy is still possible. More»