A group representing 20 Chrysler lenders, holding $1bn (£674m) in debt, are set to object to the firm’s move into Chapter 11 bankruptcy protection.
Chrysler said on Thursday it would enter protection immediately and form an alliance with Italian carmaker Fiat.
The 20 lenders are unhappy at the terms of a government-brokered deal to cut Chrysler’s $6.9bn (£4.67bn) in debt.
The group also says that plans to sell off Chrysler assets within 30 to 60 days may infringe their legal rights.
Chapter 11 protects firms from their creditors, allowing them to rearrange their finances while still trading.
Looking ahead, Chrysler has said it will close all of its plants from Monday until the carmaker comes out of bankruptcy.
However, three factories sent workers home on Thursday after suppliers stopped sending parts over fears that they would not be paid. Full story…