On 22 December 1944 the 101st Airborne were surrounded by the Germans during their Winter counter-attack, the Battle of the Bulge. I read on Wikipedia that General Anthony McAuliffe read the German commander's ultimatum asking the US to surrender to avoid annihilation, scrunched the paper up and replied "Nuts!".
At the time, did General McAuliffe know that Patton would be on his way to reach the troops to free them from the Germans? Or was this more of a "we will never surrender" statement from the general?
Follow-on question: did the refusal of the US troops to surrender have an effect on the Germans' morale?
General McAuliffe was informed prior to the surrender ultimatum that Patton was on his way to relieve him.
After realizing the full extent of the German offensive, General Eisenhower met with several of his subordinates, including General Patton, on Tuesday morning, December 19, 1944 at Verdun. The situation was quite desperate;
[General Omar] Bradley, already in a testy mood, pointed to a red arrow labeled "20 German tanks" approaching Namur on the Meuse, farther west than previously reported. "What the hell is this?" he demanded. An intelligence officer hurried to the map, snatched off the errant marker, and apologized for the error.
Patton, on the other hand, was quite optimistic about the situation, saying that he could meet the Germans head-on in three days with three divisions (the 4th Armored Division, the 26th Infantry Division, and 80th Infantry Division) and launch a full six-division counterattack in six days. Even before Patton left the meeting he began issuing movement orders.
During the night of December 19, The VIII Corps commander, General Troy H. Middleton, taking instructions from Patton, informed General McAuliffe that a combat command of the 4th Armored Division was on its way to Bastogne. At noon on December 20, McAuliffe was informed that the entire 4th Armored Division was to help. A small team from Combat Command B, undoubtedly having traveled very fast and stealthily, arrived in Bastogne shortly after noon on the 20th.
Bastogne was relieved on December 26, 1944 by Combat Command R of the 4th Armored Division, supported by the 80th Infantry Division.
Sources:
The Guns at Last Light: The War in Western Europe 1944-1945, by Rick Atkinson
US Army in World War II, European Theater of Operations; The Ardennes: Battle of the Bulge chapters XIX and XXI, by Hugh M. Cole