NEW YORK, April 30 (UPI) -- U.S. automaker Chrysler LLC Thursday said it has filed for Chapter 11 bankruptcy in New York and reached an accord to partner with Italian automaker Fiat SpA.
Chrysler officials said they sought bankruptcy protection because they couldn't get concessions from all of its lenders, the company said in a news release.
"As a result, under the direction of the U.S. Treasury, Chrysler LLC and 24 of its wholly owned U.S. subsidiaries today (Thursday) filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court for the Southern District of New York," the company said.
Chrysler sought federal financial assistance after its sales swooned, and was working with the Obama administration to restructure. President Barack Obama announced the partnership and bankruptcy intentions in Washington.
Chrysler Chief Executive Officer Bob Nardelli said the Fiat partnership would allow the two automakers to optimize manufacturing and global supplier bases, and provide each access to additional markets.
"This partnership transforms Chrysler into a vibrant new company with a wealth of strategic advantages," Nardelli said. "Benefits to the new company include access to exciting products that complement our current portfolio, technology cooperation and stronger global distribution."
Chrysler said it will ask for a quick approval of the agreement with Fiat and sale of Chrysler's assets to the new company. A quick emergence from bankruptcy "should allow a leaner new company to emerge in a matter of 30 to 60 days, well positioned for long-term viability," the company said.
Nardelli said he told Chrysler's board and U.S. Treasury Department officials he would remain as CEO until the Chrysler emerges from Chapter 11 and the alliance with Fiat is complete.
"Now is an appropriate time to let others take the lead in the transformation of Chrysler with Fiat," Nardelli said.