Chrysler: It's Over, Except When it Isn't

The WSJ is saying that talks between the Treasury and Chrysler lenders have broken down and Ch 11 is imminent. The Detroit Free Press is reporting that the Treasury has sweetened its offer. We have until 11:59:59 on April 30th to officially call it one way or the other (unless they wrap things up before then). Is the suspense killing you? Personally I can't sleep, but that may have more to do with all the wine filled chocolate candy I just inhaled.

I am still standing by my prediction that Ch11 will be avoided. The amount of money being argued over simply is not worth the chance that things will go horribly wrong in a quick rinse, 363 filing. The hold outs are getting what they want, more money out of the deal, so why wouldn't they sign on once they have convinced themselves that they have gotten the best deal possible?

Now several people have brought up the fact that certain entanglements, such as unwanted dealers, would be dispatched very easily in bankruptcy and that this may be a motivating factor in going ahead with Ch 11. While I certainly concede this point, I still feel that it is far riskier to try and speed skate through bankruptcy court rather than deal with these issues later on down the road. The economy is woozy, having just been been walloped, and the last thing the Administration needs is a destabilizing force. I just don't think Chrysler has the legs to withstand Ch 11 without slipping into Ch 7. GM would have a far better chance of trying to pull off a 363 good asset/bad asset bankruptcy.