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NEW YORK (CNNMoney.com) — General Motors has fallen far short of the bondholder support it needed for its proposed debt-for-stock offer, according to a source familiar with the matter, virtually guaranteeing that the nation’s largest automaker will be forced to file for bankruptcy court protection within the week.

The bondholders own $27 billion in corporate notes. GM (GM, Fortune 500) needed owners of 90% of those bonds to accept stock in return for the debt in order to reduce its interest expenses to a more manageable level.

Full Story At money.cnn.com

NEW YORK (CNNMoney.com) — The Manfredis were among the fortunate ones Thursday, avoiding Chrysler’s ax as it struck down nearly 800 dealerships across the nation.

“I’m one of those lucky dealers … who will remain a dealer,” said Corrado Joe Manfredi, who owns 11 dealerships with his son Nick in the Staten Island borough of New York City.

Joe believes that his prominence on the island has allowed him to survive. But it’s hard to feel lucky these days. Over the last year, the Manfredis and other dealers have weathered the toughest sales environment since the Great Depression.

Full Story At money.cnn.com

NEW YORK (CNNMoney.com) — Chrysler dealers nationwide were fearing the UPS guy on Thursday.

For 789 dealerships, the man in brown came carrying an overnight letter from Chrysler LLC indicating that they are being closed as part of the automaker’s bankruptcy. Some dealers received additional phone calls from company representatives, while others discovered their fate after being contacted by reporters.

Those calls and letters informed dealers that on Thursday morning Chrysler had filed a plan with the bankruptcy court listing the 789 Chrysler, Jeep and Dodge dealers it selected to discontinue operations.

Full Story At money.cnn.com

NEW YORK (Fortune) — Among the thousands of pages of documents filed in connection with Chrysler’s Chapter 11 bankruptcy are affidavits from Chrysler executives that open up a window on the auto business previously closed to outsiders in this intensely competitive business.

They reveal an almost unimaginable complexity in the design, manufacturing, and distribution of new cars.

But what’s more revealing is that the affidavits expose Chrysler’s inability to successfully compete and the dangers facing the company in a prolonged bankruptcy.

Full Story At money.cnn.com

NEW YORK (CNNMoney.com) — Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.

This revelation was buried within Chrysler’s bankruptcy filings last week and confirmed by the Obama administration Tuesday. The filings included a list of business assumptions from one of the company’s key financial advisors in the bankruptcy case.

Full Story At  CBS News

AP) Italian automaker Fiat Group SpA will sign paperwork to become a partner with Chrysler LLC by Thursday, according to three people briefed on the deal.

The partnership is the last piece of a huge restructuring plan needed to keep Chrysler alive as it approaches Thursday’s government deadline to cut labor costs, slash debt and take on a partner.

The people said Wednesday that despite the partnership, Chrysler could still wind up under Chapter 11 bankruptcy protection for a short time if some creditors don’t agree to reduce their debt. But they said the government would agree to finance the restructuring rather than cut off Chrysler’s aid and leave it destined for liquidation.

Full Story At  msnbc.com

NEW YORK – Attorneys for Chrysler LLC said the company will file a motion by Saturday to sell substantially all of its assets to Italian automaker Fiat Group SpA, but that won’t include eight plants, including five that the automaker revealed it will shutter by the end of next year.

While Chrysler faced its first hearing Friday in Manhattan bankruptcy court, court documents showed the ailing automaker plans to close plants in Michigan, Missouri, Ohio and Wisconsin that employ about 4,800 people.

Full Story At money.cnn.com

NEW YORK (Reuters) — The bankruptcy judge who oversaw the massive cleanup after the Enron and WorldCom meltdowns has a new challenge that may be his toughest yet – overhauling Chrysler LLC.

Judge Arthur Gonzalez of U.S. Bankruptcy Court in Manhattan was assigned the case Thursday after the iconic carmaker sought Chapter 11 bankruptcy protection following the breakdown of intense negotiations with lenders.

Chrysler filed the case in one of the premier federal bankruptcy courts, and Gonzalez is one of its most experienced judges.

Full Story At money.cnn.com

NEW YORK (CNNMoney.com) — Once a titan in the insurance world, AIG is a shadow of its former self, and experts say the company is likely doomed for failure.

That’s partly because AIG (AIG, Fortune 500) is slowly getting rid of its strong, moneymaking businesses as it attempts to pay back the roughly $130 billion it has borrowed on its $182 billion government bailout.

The company had to give up more than it had anticipated to pay back taxpayers because of the horrid credit environment, and analysts believe AIG may be giving up too much for it to survive on its own. Not that there was much choice.

Full Story At money.cnn.com

NEW YORK (CNNMoney.com) — General Motors will announce more job cuts and plant closing plans in the coming weeks, CEO Fritz Henderson said Friday.

The embattled automaker, which has until June 1 to reach agreements with creditors and unions in order to avoid a government-forced bankruptcy, originally told regulators in February that it planned to eliminate 14 of its current 47 U.S. plants by 2012, and reduce U.S. staff by about 20,000 jobs.

Full Story At money.cnn.com

NEW YORK (CNNMoney.com) — General Motors’ stock price has been stuck in reverse as investors seem to be betting that bankruptcy is inevitable.

Through Friday, shares of GM (GM, Fortune 500) were down 36% this year. The stock fell another 16% Monday afternoon after new reports that the government is pushing hard for bankruptcy.

A GM bankruptcy could cause tremendous upheaval in an already troubled industry. But interestingly, investors are treating the likelihood of a GM bankruptcy as an excuse to scoop up the stocks of many of its top rivals.

Full Story At news.yahoo.com

CLIFTON, N.J. – Friday night in northern New Jersey, circa April 2009, offers clues to prove any theory about the American economic meltdown, depending on what you want to believe. Just like so many places these days.

Craving optimism? Watch the tour bus emptying into the La Quinta lobby off Route 3, its occupants abuzz about their weekend sightseeing jaunt into Manhattan. Or see the hungry diners spilling out the door of Carino’s Italian Grill in the Clifton Commons shopping center — a line of customers waiting to put their money into the consumer economy.