Chrysler-Lenders Meeting Goes South

As the doomsday hour draws even closer for American manufacturer Chrysler, reports start poring in, some bringing good and some bringing bad news. After we reported earlier today that the signing of the new contract with the UAW (this was the good news), a reported posted by Associated Press states that a late night meeting between Chrysler and its lenders went bad, as the latter insisted for a "better deal". According to the report, the US government added an extra $250 million to the $2 billion the lender banks agreed to already and gave the hedge funds a very short time to "work it out". The problems began when some of the funds came up with their own offers. This placed the US treasury Department in the position of negotiating with 46 different funds. As a result, the deadline has been extended until the early hours of the morning. One of the inside sources who told AP about the developments added that “this is the one shot when everybody had a chance to say yes or no. You had 46 different people here, and they said no." This despite the fact that yesterday Chrysler' largest creditors agreed to a $2 billion cash pay in exchange for the $6.9 billion in debt. The agreement might be a life-saver for the company. "If approved, it would clear a significant hurdle on our continuing journey toward long-term success, but the proposed agreement still needs to be approved by all of the secured lenders," Chrysler's CEO Bob Nardelli said in a memo obtained by Reuters. Chrysler's deadline ends tonight, at midnight. If by that time an agreement isn't reached, Chrysler will be forced into bankruptcy, even if the proposed deal with Fiat will take place. Update: Chrysler files for bankruptcy