Canada

Chrysler LLC is expected to file for bankruptcy protection in the United States by the end of the week and the Canadian and Ontario governments will jump in to help backstop the company with financing that will enable it to keep making and selling cars while it restructures, sources said. The bankruptcy filing is expected even though a deal by Fiat SpA to create a strategic alliance with the No.

Nortel Networks Corp., the insolvent telephone-gear maker, won an extra three months to work out a plan that will allow the company to emerge from bankruptcy, Bloomberg reported. Ontario Superior Court Judge Geoffrey Morawetz today agreed to extend the order, which was due to expire May 1, to July 30, following a hearing in Toronto. The order protects the Toronto- based company from creditor demands and lawsuits. Nortel filed for bankruptcy in January in the U.S. and Canada after losing almost $7 billion since 2005.

Nortel Networks Corp. needs its protection from bankruptcy extended to July 30, says the court-appointed monitor in the telecom equipment maker's Canadian insolvency proceedings. The current extension of Nortel's stay under the Companies' Creditors Arrangement Act ends May 1, and Nortel is seeking a further 90-day period of shelter from creditors, The Canadian Press reported.

General Motors of Canada Ltd. (GM), following its U.S. parent's lead Monday, detailed additional restructuring moves including cutting its hourly workforce by almost 6,000 by 2014 and reducing its dealer networks by 42% by the end of 2010, Dow Jones Newswires reported. The General Motors Corp. (GM) unit said it's continuing to work with the Canadian and Ontario governments and expects to soon complete a short-term bridge-loan agreement. GM Canada is required to provide an updated restructuring plan by May 30 to be eligible for government financial assistance.

The Canadian unit of Chrysler may not need to seek bankruptcy protection, even if the company does so in the United States, Canadian Finance Minister Jim Flaherty said on Saturday. Flaherty said the automaker's cost-cutting agreement with the Canadian Auto Workers union, announced late Friday, represented a "fundamental change" in the company's efforts to qualify for emergency government loans, Reuters reported. The company must also clinch a partnership with Fiat SpA. "The legal situation may be different in Canada than in the United States.

Canada is preparing contingency plans in case General Motors Corp. and Chrysler LLC seek bankruptcy protection, Industry Minister Tony Clement said. “We have made a lot of contingency plans,” Clement told reporters in Ottawa today. “Our plan A is moving forward outside of bankruptcy protection, but there are plan Bs and plan Cs, and that’s responsible to protect taxpayers,” Bloomberg reported. The Canadian and Ontario governments are in discussions with the U.S.

The governments of Canada and Ontario are in advanced negotiations to provide unprecedented bankruptcy financing for the Canadian operations of General Motors Corp. and Chrysler LLC, The Globe and Mail reported. According to people familiar with the matter, federal and provincial officials are in the final stages of discussions with the U.S. Treasury and senior auto executives toward a contribution of as much as $6 billion (U.S.) for unique cross-border financing that would see GM and Chrysler through the initial phases of creditor protection.

Quebecor World filed a reorganization plan with a U.S. court aimed at recapitalizing the printer of Time and Cosmopolitan magazines to allow it to emerge from creditor protection by mid-July, Reuters reported. The Montreal-based commercial printer said late on Monday that a U.S. bankruptcy court would hear the plan on May 15, with details of what creditors will be able to recover released 10 days prior to the court hearing.

Ottawa is refusing to rescue AbitibiBowater Inc. with loan guarantees--putting thousands of jobs in communities across Canada at risk after the forest products giant filed for bankruptcy protection, the Globe and Mail reported. AbitibiBowater, one of the country's oldest companies and the world's biggest producer of newsprint, filed for Chapter 11 protection in the United States Thursday, citing a debt burden of more than $6 billion (U.S.), and plans to file for similar protection in Montreal today, under the Companies' Creditors Arrangement Act.

The key players who will determine whether Chrysler LLC has a future in Canada are digging in their heels, increasing the danger that a rescue effort could collapse, the Globe and Mail reported. The campaign to convince the Canadian Auto Workers to offer more concessions to Chrysler Canada Inc. is growing increasingly public, with would-be Chrysler saviour Fiat SpA jumping into the fray this week, followed by Industry Minister Tony Clement, and yesterday, Chrysler Canada president Reid Bigland.