Chrysler's fate rests with debtors

April 24, 2009 5:14:33 AM PDT
A published report says the Treasury Department is preparing a Chapter 11 bankruptcy filing for Chrysler. Pensions and retiree health care benefits of the United Auto Workers union would be protected, according to the report in the New York Times.

A life outside of bankruptcy appears to hinge on whether Chrysler and the U.S. government can get the company's lenders to forgive a large portion of the company's debt in exchange for stock.

The lender issue remains unresolved, according to the newspaper.

Chrysler has been living on $4 billion in government aid since the beginning of the year. The Obama administration has offered another $500 million in working capital to get through April 30, when it has said it would cut off aid.

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