Bankruptcy | featured news

Things were already tough in Kokomo, Indiana.

The fate of Chrysler shifted from Washington to a Manhattan courtroom on Friday, as lawyers for the automaker sought a settlement with creditors.

With a bankruptcy filing by Chrysler appearing all but certain, President Obama will address the fate of the automaker at noon.

Under bankruptcy plan government is preparing, Fiat management would take control, sources say.

The Treasury Department has sweetened its offer to holders of Chrysler’s secured debt in a last-minute attempt to keep the iconic American automaker out of bankruptcy court, according to people briefed on the matter.

Chrysler’s unsecured creditors have reached a preliminary deal with the Treasury Department, two people briefed on the matter said on Tuesday.

The Obama administration remains focused on bringing Chrysler and Fiat into a working partnership, a U.S. official said on Thursday, dismissing a news report that the U.S. car-maker faced imminent bankruptcy.

General Motors Corp. will not make a $1 billion debt payment due June 1, its CFO, Ray Young, told reporters on Wednesday. Instead, it is hoping to complete a debt-for-equity exchange or be forced to resort to bankruptcy.

GM's stock plummeted on the news.

What was a bad situation is likely to turn worse, as more properties are forced into bankruptcy or foreclosure.

The Treasury Department is directing General Motors to lay prepare for a bankruptcy filing by June 1, despite GM's assertion that it could still reorganize without such a filing, The New York Times reported unnamed sources as saying on Monday.