Building on speculation that first leaked yesterday is word this morning that a pair of Obama administration officials have told The Associated Press that Chrysler will indeed file for bankruptcy. The decision was apparently reached after debtor negotiations with hedge funds "crumbled overnight."

If the AP's sources are correct, we assume that the Chapter 11 announcement will be made quickly – likely later today. According to the report, President Obama is slated to talk about the auto industry at noon, at which point we wouldn't be surprised to hear him break the news.

A bankruptcy filing by the Pentastar is not expected to rule out a merger with Fiat, or indeed, trigger the shuttering of the company. Officials close to the proceedings have already gone on record saying that a deal with the Italian automaker could happen inside or outside of bankruptcy, and that arrangement could be finalized as early as today.

[Source: The Associated Press | Image: Andrew Cutraro/AFP/Getty ]