The U.S. government, which holds a $4 billion stake in the automaker, tried to broker a deal between workers, creditors and the company but it ultimately failed.

U.S. President Barack Obama said he expects the bankruptcy to be resolved in 30 to 60 days.

"This process will be quick, it will be efficient," Obama said.

The U.S. government committed an additional $8 billion to stabilize the company in the coming months and said Italian car maker Fiat has agreed to a partnership with Chrysler.

If the Obama administration's plan is approved by bankruptcy courts, Chrysler's operations will be sold to a new company under entirely new ownership. None of the obligations to creditors and employees would remain.

Chrysler's existing owners would lose all their holdings and a healthcare trust fund for retirees will own the controlling stake.

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