Bankruptcy better for Chrysler?

So they file for Chapter 11, because the hedge funds who hold 30% of Chrysler's secured debt refused the deal presented by the government. The president sounded critical of these "money people" for not agreeing.

He should thank them instead. I think Chrysler under Chapter 11 will have much easier time eliminating and modifying the existing obligations and claims, and faster too. That should eventually cost the government (= taxpayers) less money in the long run.

Except... those CDS contracts. I am very, very curious how those claims will be handled by the bankruptcy judge.