- The Washington Times - Thursday, April 23, 2009

The Treasury Department is preparing a Chapter 11 bankruptcy filing for Chrysler LLC that could come by next week, people with direct knowledge of the action told the New York Times on Thursday.

The Treasury has an unofficial agreement with the United Auto Workers union to protect members’ pensions and health-care benefits for retirees.

The newspaper also said Italian automaker Fiat would complete its alliance with Chrysler while the company is under bankruptcy protection.

President Obama told Chrysler executives last month they had not done enough to improve the company’s financial situation after receiving a federal bailout and would have to enter into an agreement with Fiat.

Federal and Chrysler officials could not be reached for comment.

Chrysler and General Motors Corp. have received billions in federal bailout money. Ford Motor Co., the third of the country’s Big Three automakers, has not receive federal bailout money.

Its unclear how Chryslers lenders will be affected by the deal. They hold $6.9 billion in company debt, the newspaper reported.


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