According to an article in the Dallas Morning News, the struggling automaker Chrysler will file for Chapter 11 bankruptcy because it was unable to settle debt with lenders.
The article said:
The filing comes after some of the company’s smaller lenders refused a Treasury Department demand to reduce the amount of money the troubled automaker owed them.
The Chrysler bankruptcy won’t necessarily mean the closing of its business and liquidation; but the fate of its employees, retirees and suppliers is uncertain. Chrysler still owes its suppliers over $7 billion and some of those suppliers could be devastated by the bankruptcy filing. We can expect many Chrysler suppliers to face Chapter 11 bankruptcy or even closure because of the Chrysler bankruptcy filing. And the 39,000 Chrysler employees are almost guaranteed to face some job losses, especially if the proposed merger with the Italian automaker Fiat goes ahead as planned.
Some of those workers are probably already struggling with financial issues such as foreclosure and credit card debt . But it is probably the 65,000 U.S. retirees and their families who depend on Chrysler for pension benefits and healthcare coverage who will experience the biggest change as Chrysler restructures its debt in bankruptcy. Some of the younger Chrysler retirees will almost certainly face retirement payout reductions under the Chrysler bankruptcy.