With Chrysler's hedge fund lenders unwilling to accept the U.S. government's final offer, Chrysler is almost certain to file for Chapter 11 bankruptcy today. Tonight is the government's deadline for a deal. President Obama declared last night that it would be "a very quick type of bankruptcy." That may or may not be so (Chrysler's lenders seem eager to battle out their claims in court), but it is clear that the company will need more bailout money to keep operating during the process. Chrysler has already taken $4 billion in loans so far.
The Washington Post reports that a tag-team, U.S.-Canada bailout is in the works:
During the bankruptcy, the governments would provide about $4 billion in new funds, with 80 percent coming from the United States and 20 percent from Canada, which hosts a number of Chrysler operations. As the company emerged from its reorganization, the United States would provide roughly another $5 billion, with more coming from Canada, the sources said. The sources warned, however, that the figures were fluid.
The countries would also get a stake in the company: 8 percent for the U.S. and 2 percent for Canada.
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