In an action that has not been unexpected, it is being reported that the Treasury Department is preparing a Chrysler Bankruptcy filing that is to be filed next week.

The New York Times says the report is from “people with direct knowledge of the action.”

In the story, the UAW and the Treasury are supposedly working out the pensions and health benefits that would be protected as a condition for the Chapter 11 bankruptcy filing.

Fiat would complete its alliance with Chrysler while the company is under bankruptcy protection.

Naturally, this leads to a lot of unanswered issues that will have to be resolved. Among them, what happens to the Chrysler lenders? They are on the hook right now for close to $7 billion in debt.

You can be sure that this action is going to spur more legal action and tie up the court system for years to come.

What do you think of this latest news on Chrysler? Is GM next?