Its the credit default swaps. Bankruptcy is a default event. If Chrysler files, they get the insurance money to make them whole. If they cut a deal, they lose! Either way, if AIG is on the other side of those swaps, you and I, as tax payers, take it in the shorts...
“a small group of speculators endangering Chrysler’s future”
BS. These are bondholders. They loaned money to Chrysler. If we start calling bondholders speculators, there are going to be no more folks lending money to corporate America. If we are going to treat them like dogs and take away their rights, without due process of law, they aren’t going to lend their money anymore.