Chrysler LLC will file for Chapter 11 bankruptcy protection to reorganize the troubled carmaker after talks with debt holders broke down, an Obama administration official said, according to reports.
An official who spoke on condition of anonymity told Bloomberg that the failure of some small creditors to agree to a final settlement prompted the bankruptcy option.
The President - whose auto task force had been working to get Chrysler creditors agree toa deal - to will speak today at noon Eastern Time to speak about the auto industry, the White House said today in a statement, Bloomberg reported.
Some banks, seeking to salvage what they could from the struggling company, had already agreed to exchange $6.9 billion in secured debt for $2 billion in cash. The offer was increased to $2.25 billion, however some creditors would still not accept.