Chrysler files for Chapter 11 bankruptcy

Chrysler LLC filed for Chapter 11 bankruptcy protection in New York on Thursday, kicking off what the Obama administration predicts will be a 30- to 60-day restructuring of the third-largest U.S. automaker.

At the same time, Chrysler entered into a partnership with Italian auto maker Fiat SpA, President Barack Obama said in a noon address. Obama said the partnership would not only let Chrysler survive “but to thrive.”

The U.S. government will provide up to an additional $8 billion in aid, including up to $3.5 billion in so-called debtor-in-possession financing, to ensure Chrysler survives the historic reorganization process.

The administration had hoped to keep the car maker out of court but decided it was the only option after a deal to cut the company’s debt was rejected late Wednesday by several of the company’s lenders, a senior administration official said.

Click here to read The Wall Street Journal story.

WEDNESDAY

BLOOMBERG NEWS: Chrysler will file for bankruptcy, official says