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Chrysler seeks protection from bankruptcy

Chrysler will be placed under the protection of Chapter 11 bankruptcy in New York for a period that could last up to 60 days, officials have said Thursday the U.S. Government.

The automaker has taken this decision after that negotiations with a small group of creditors had failed, only 24 hours before fixed by the U.S. government to maturity to submit a restructuring plan.

The Obama administration has long hoped to avoid the American company goes bankrupt, it had become evident that these creditors do not want to compromise on proposals to reduce the guarantee of U.S. $ 6.9 billion of Chrysler debt.

The decision of the company to place itself under the protection of bankruptcy does not necessarily mean that the third American automaker will stop its activities. Chrysler should enter into a partnership with Fiat Thursday as part of its restructuring plan.

The U.S. President Barack Obama must evoke the state of the American auto industry Thursday noon.

For a few days already, the working group set up by the Treasury department was busy removing barriers to Chrysler Develop a recovery plan to cross the economic crisis ravaging automakers in the United States.

In addition to the partnership with Fiat, the union of the United Auto Workers has ratified Wednesday night, a pact aimed at compression of expenditure. Earlier this week, the Treasury Department had reached an agreement with four banks holding the majority of Chrysler's debt, in exchange for $ 2 billion in cash.

But according to the administration, about 40 hedge fund holders, holding approximately 30 percent of the debt should also approve the proposal. However, these creditors have was unjust and requires new conditions.

Chrysler seeks protection from bankruptcy picture #1

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