The dealers have until Jan. 25 to notify Chrysler they intend to seek arbitration, the letter said, reiterating terms of a measure signed into law on Dec. 16.

The letter does not contain Chrysler’s list of criteria for rejection. Chrysler, as required by the law, will outline those terms in individual letters to be sent before January 16, spokeswoman Kathy Graham said.

The dealers lost their franchises June 9 at the end of Chrysler’s six-week, U.S.-directed trip through bankruptcy court.

The arbitration process was signed by President Barack Obama as part of a $446 billion appropriations bill. The legislation also affects General Motors Co., which announced plans to terminate 1,350 dealerships in May in advance of its bankruptcy.

Spokesman Greg Martin said GM is working on its “administrative next step. We plan to communicate with dealers soon.”

The law requires that arbitration must be wrapped up in six months.

Chrysler said in the form letter today that it is “assessing its rights and remedies with respect” to the legislation.

Speaking to reporters on Dec. 17, CEO Sergio Marchionne said restoring some of the large numbers of franchises could “cause havoc within Chrysler.”

Earlier in December, Chrysler had proposed its own binding arbitration process to keep Congress from getting involved. The negotiations ended when the legislation was introduced.

Marchionne said Chrysler’s offer would have “guaranteed a disgruntled dealer the opportunity to air its concern. Having said this, if Congress wants this, Congress gets this. And we’ll live with the consequences and react accordingly.”

Tammy Darvish, a co-chair of the Committee to Restore Dealer Rights, said: “It’s a shame the time and the money that Chrysler and GM have spent to fight this for absolutely no reason at all. If somebody can come back, just let them come back. Why are they going to spend millions more dollars to fight this?”

Doug Alley, owner of rejected Alley’s Chrysler Dodge in Kingsport, Tenn, said he hasn’t yet decided whether he’ll seek arbitration.

“We are assessing our position,” he said. “We’re waiting to see the criteria used for our rejection.”

General Motors has paid about 90,000 U.S to their employees to show that they are not effected by the anticipated bankruptcy filing.

Normally GM employees are paid on Friday, however, this week checks were issued on Tuesday, told spokesman Tom Wilkinson. “It was done to reassure workers worried about bankruptcy,” he said.

GM doesn’t expect any bankruptcy filing to affect its payroll payments. The company would like to reassure its employees that they will continue receiving paychecks even if the company files.

Company representatives also said that GM paid its approximately 1500 parts suppliers early. Payments were made today instead of the scheduled date of June 2, the day after the governments’ restructuring deadline and likely the day GM will be forced to file for bankruptcy.

General Motors’ bondholders received a much better deal this morning than the previous offer of a 10 percent stake in the company if they didn’t oppose the company’s bankruptcy filing. It’s now reported that the company will file for bankruptcy this Monday.

According to the Detroit Free Press, GM will officially file for bankruptcy on Monday. This news are recieved after at least one-third of the company’s bondholders agreed to a new debt-for-equity swap offered this morning.

Also revealed is the U.S. Treasury’s plan to give the American automaker at least $30 billion more to pay for the bankruptcy. This is on top of the $19.4 billion already lent to GM and is much more than the earlier reported total of up to $27.2 billion if the automaker declared bankruptcy. In return for the total of almost $50 billion given to GM, the U.S. Treasury would hold a 72.5 percent stake in the new GM.

That is where the new deal with GM starts to get a little fishy. The Treasury is announced to have a 72.5 percent stake in the new GM, the UAW was earlier going to have at least a 17.5 percent stake in the new GM, and the bondholders are now going to have a 25 percent stake in GM.

The key in the bondholders stakes compared to the Treasury’s and UAW’s stakes in the new GM is that the bondholders get GM as a whole, both good and bad assets. 10 percent of the bondholders equity is in the new GM, which completes the stake in new GM, and the other 15 percent is given in bad GM assets.

The 15 percent stake in bad GM assets will be the majority of claims against the bad GM assets and be given to the bondholders — essentially after “good GM” buys back the “best” parts of “bad GM” — in two steps after certain goals are reached. The first half of the bad GM assets will be given after the new GM is worth more than $15 billion and the last of the stake will be given after the value of the new GM reaches $30 billion.

GM said that under today’s offer the company would emerge from bankruptcy with $17 billion in debt, including the $8 billion owed to the Treasury and $2.5 billion to the UAW. The Treasury would also carry $2.5 billion in preferred shares and the UAW another $6.5 billion in preferred shares.

The bankruptcy plan still calls for GM to enter and exit extremely quickly. Bob Lutz told that, everybody would have an incentive to get in and out as much as quickly. “A Chapter 11 that lasted for months and months would be very damaging.”