Bloodstar

And really, I thought it was done for but nope, there’s life!:

Italian automaker Fiat Group SpA will sign a partnership agreement with Chrysler LLC by Thursday as negotiations continue to keep the struggling automaker alive without filing for bankruptcy protection, according to three people briefed on the deal.

One thing is certain: Chrysler will not be sold off in pieces, according to another person briefed on the fast-moving talks.

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

But it’s not out of bankruptcy danger yet:

On Tuesday, four major banks that hold 70 percent of Chrysler’s $6.9 billion in secured debt agreed to a deal that would erase the debt for $2 billion in cash. But 46 hedge funds that hold the remainder of the debt have refused to go along, leading to further negotiations.

The people familiar with the deal said that if the hedge funds don’t agree, Chrysler could go into a short “surgical” bankruptcy under Section 363 of the bankruptcy code. The smaller lenders would have little power to stop the debt from being restructured in bankruptcy court, since the lenders holding the majority of the debt are on board with the plan, the people said.

Even so, I’m rather impressed with how things have come along. I really thought they were toast.

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