The Wall Street Journal reports that negotiations between Chrysler, the Treasury Department and the major banks and companies that hold secured debt in the company are not going well. Neither side, it appears, can agree on the true value of either the company or the debt:
 

Talks between the U.S. Treasury and Chrysler LLC’s bank lenders have hit a standstill as they debate a multibillion-dollar gap over what the car maker would be worth should it be liquidated in bankruptcy.

Some senior lenders believe they would get more than 70 cents for each dollar of their secured loans if Chrysler is broken up and sold, said people familiar with the talks. Other lenders don’t have an exact number nailed down and are awaiting detailed figures from the auto maker on its assets.

All of the 40-plus lenders and investors are nonetheless incensed by the last Treasury offer: that they accept about 15 cents per dollar of face value of their loans, or roughly $1 billion of the $6.9 billion owed them.

These negotiations are crucial to the company if it is to avoid bankruptcy next month. The Obama auto taskforce has given them until May 1 to complete a joint agreement with Italian automaker Fiat, further restructure their debt and reduce their costs.

Among the banks that hold billions of dollars in Chrysler debt is JP Morgan Chase, which has received an enormous amount of bailout funding from the federal government as well. As we reported a couple days ago, some activists are calling for a boycott of the bank in order to pressure them to be more conciliatory in their negotiations with Chrysler.