US Rallies for Chrysler

With bankruptcy becoming more and more of a certainty, mostly because of the hedge funds which did not agree with the $2 billion in cash swap for a $6.9 billion debt, Chrysler's swan song draws more and more support from government officials. After President Obama stated its high hopes for the future of the manufacturer, it is now the turn of Jennifer Granholm, Michigan Governor to step in.

"On behalf of Michigan, on behalf of the thousands of people who will be affected if this company is forced into bankruptcy, I am publicly asking these hedge funds to not be greedy but to do what the banks have done and what everyone else around the table has done - take the concessions," she was quoted as saying by msnbc.com

The hedge funds seem to stand behind their initial claims and not give in. 46 hedge funds came up with their own proposals, as the evening deadline draws nearer. And the bad part is that there is no going around the funds. With them holding 30 percent of Chrysler's debt, the US and Chrysler need to get a 100 percent approval of the concessions. Until now, only creditor banks, which hold 70 percent of the debt, have agreed to the swap.

The US Treaury Department has even added to the $2 billion initially proposed. Even faced with an extra $250 million, the debt-holders have still not agreed to the concession.

"I'm actually very hopeful, more hopeful than I was 30 days ago, that we can see a resolution that maintains a viable Chrysler auto company out there," President Obama said earlier today.