Chrysler creditor talks pick up pace

Associated Press / April 15, 2009
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DETROIT - The pace of negotiations between Chrysler LLC and its debtholders picked up this week, but talks at General Motors Corp. have slowed as both companies face looming government deadlines to cut their debt to avoid bankruptcy.

Banks and other Chrysler creditors that hold $6.9 billion in secured debt are preparing a counteroffer after they rejected a proposal from the automaker and the government to erase the loans for $1 billion, said a person briefed on the negotiations.

At GM, a group representing bondholders is still waiting for a counteroffer from the company, according to another person with knowledge of the talks.

Both people spoke on condition of anonymity.

The Treasury Department is getting involved in the negotiations with GM and Chrysler's debtholders after the companies failed to finalize their restructuring plans by the government's original March 31 deadline. President Obama gave the automakers more time, with instructions to make even tougher cuts.