San Francisco's Asian Art Museum is in dire financial straits and could be forced into bankruptcy if it can't work out a new deal with its lender by Friday, according to knowledgeable sources.

Our sources say the troubles started in 2005 when the museum's directors, hoping to hedge against rising interest rates, restructured $120 million worth of loans to try to save millions of dollars.

But now rates have hit rock bottom, and their lender, JPMorgan Chase, says it plans to close the Asian Art's line of credit as of Friday - in which case, the museum would lose $20 million that it put up in collateral.

That money reportedly is insured, but one source following the developments said losing the collateral would nonetheless spell calamity for the museum.

It would still be on the hook for the $120 million in loans, but the repayment timetable would be sped up to five years from now. We're told the museum's current endowment amounts to just $60 million.

"They could only keep up with the payments for maybe a year or a year and a half before they would have to close their doors," said the source, who spoke on condition of anonymity because he is not cleared to discuss the negotiations publicly.

The museum's directors have hired bankruptcy lawyer Bruce Bennett - who helped restructure Orange County's $10 billion debt a few years back - to try to buy the museum extra time to turn around its finances.

Asian Art reps also plan to huddle with Mayor Gavin Newsom's people today in hopes of getting help with another line of credit. However, one city rep, speaking on condition of anonymity, said, "Nobody is using public money to bail them out."

It's quite a reversal of fortune for the museum, which relocated to the restored old main library in Civic Center in 2003 with the help of a $42 million city bond measure.

According to its board minutes, the museum had a balanced budget as recently as June 2009 and was racking up record attendance.

Since then, however, attendance has fallen sharply and the place hasn't seen any donor gifts in a couple of years.

Even a ballyhooed exhibit to coincide with the opening of Shanghai's world trade expo in May failed to draw the anticipated crowds.

The museum's management did not return our repeated calls seeking comment, and board directors we spoke with either appeared to be in the dark or weren't talking.

"I'm not in a position to give you the information you are looking for," said Robert Duffy, vice president of the Asian Art Museum Foundation.

Bennett, the bankruptcy lawyer, did not return our calls. A spokeswoman for JPMorgan Chase promised to look into the matter late Friday, but did not get back to us by deadline.

Running on empty: Alameda's $195,702-a-year fire chief, who came under fire for tanking up his BMW at the city pump, has resigned after failing to work out an exit agreement with the city.

Chief David Kapler was photographed by firefighters, unhappy over budget cuts, filling up his BMW convertible at a station-house pump.

Kapler, who had a $250-a-month car allowance, said the free gas was part of the pay deal he'd worked out with Alameda's previous city manager in return for not using a city car.

In a letter to City Council members, Kapler's attorney, Denise Eaton-May, said the chief should get free medical benefits for life as part of an exit deal, saying that had been in his hiring agreement.

That was news to Mayor Beverly Johnson. She said the council had never seen any such deal, "and we wouldn't have agreed to it if we did."

Upshot: Kapler resigned Nov. 5.

Horn blowing: A politically active deckhand for Hornblower Cruises who became a local cause celebre last year when he complained that he was fired for being "too gay" has been shot down by the San Francisco Human Rights Commission.

Hornblower fired Vincent Atos in late 2009, three years after he started working for the company. At the time, he was trying to organize a union for cruise workers, which he suspected had something to do with his getting booted.

Labor and gay rights activists rallied to his defense, demanding that Atos be reinstated and arguing that he was fired essentially for being a "gay union organizer."

Alas, the National Labor Relations Board dismissed Atos' complaints.

But the real kicker came just the other day, when the city's Human Rights Commission concluded that Atos had repeatedly made flirtatious, sexually charged and inappropriate comments on the job - and had even pressured one male employee to "come out" against his will.

In short, the investigators said, Atos was "terminated for inappropriate sexual conduct in the workplace."

And finally: San Francisco SupervisorChris Daly, who will be termed out in January, is still looking for a job.

Daly's plans to take over a local bar hit a snag over the lease terms.

"And nobody has mentioned my name for interim mayor," he said. "I think I could do the job - and I do need one."

EXTRA! Catch our blog at www.sfgate.com/matierandross.