Chrysler Will File Chapter 11 Bankruptcy

Despite the efforts of the administration to work out a deal with Fiat and their creditors, Chrysler will announce a bankruptcy filing today.

Talks between the Treasury Department and lenders aimed at keeping Chrysler LLC out of bankruptcy broke down late Wednesday, making it all but certain that the car maker will file for Chapter 11 protection Thursday, according to people familiar with the discussions.

Administration officials, who have been braced for a Chrysler bankruptcy filing for weeks, say all the pieces are in place to get the country's third-largest employer through the court quickly, perhaps in a matter of weeks.

The talks with Chrysler's lenders broke down after the Obama administration's automotive task force worked into the evening to persuade several hedge funds and other lenders to accept a deal to reduce Chrysler's debt, said people involved in the talks.

More auto bailout money well spent.

I've thought all along that bankruptcy was the best way to go for the failing auto companies. That will give them a chance to restructure the union contracts that are killing them. In the end, Chrysler should emerge a much stronger company and one that can build cars for a reasonable price.

UPDATE: Jake Tapper has the details on the new Chrysler.