Chrysler talks break down, bankruptcy looms

Special Report:Global Financial Crisis

A walking stop sign is seen in front of the logo of Chrysler at a car dealership in New York, the United States, April 7, 2009. The U.S. Treasury will provide a further five billion dollars in loans to General Motors and 500 million dollars to Chrysler as the automakers work on their viability plans, officials said Tuesday. (Xinhua/Liu Xin)
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CHICAGO, April 29 (Xinhua) -- Talks between the U.S.
Treasury Department and Chrysler LLC lenders over the automaker's debt broke off
late Wednesday, leaving bankruptcy the automaker's all but certain option, news
agencies reported.

Chrysler will file for bankruptcy after the talks
broke down, since its 80 percent of stocks are controlled by private-equity firm
Cerberus Capital Management LP, Reuters reported, quoting the Wall Street
Journal.

The Associated Press also reported that the talks
"have disintegrated," citing its own sources.

"After allowing talks to continue late into the night
Wednesday, the Treasury Department finally ended negotiations after the hedge
funds were unable to come to an agreement," the AP report said.

The U.S. government had set an April 30 deadline for
Chrysler to strike a deal with Fiat after concluding that the struggling
automaker would not be viable on its own.

The talks between Chrysler LLC's lenders and the
Treasury Department was aimed at reducing the automaker's 6.9 billion dollars in
secured debt and keep it out of bankruptcy protection.

The breakdown also means further emergency government
aid for Chrysler will be withheld.

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