DETROIT (AP) - Talks between Chrysler's lenders and the Treasury
Department to reduce the automaker's $6.9 billion in secured debt
and keep it out of bankruptcy protection have disintegrated
That's according to a person familiar with the talks.
The company's fate was in the hands of about 40 hedge funds that
hold about 30 percent of its debt. Although four banks holding 70
percent of the debt had agreed to erase it for $2 billion, the
hedge funds were holding out for a better deal.
After allowing talks to continue late into the night Wednesday,
Treasury finally ended negotiations after the hedge funds were
unable to come to an agreement.
The deal's failure means Chrysler will seek bankruptcy
protection unless something can be worked out before the
government's 11:59 p.m. EDT deadline.