Chrysler reorganization plans may see the light of the day with the group of Non TARP lenders disintegrating
Oppenheimer Funds succumbed to the enormous pressure to withdraw and said it has “determined that the senior creditors can no longer reasonably expect to increase the recovery rate on the debt they hold by opposing the Taskforce’s restructuring plan.”
Victory for the Obama administration
This group of dissenting creditors, who resisted Chryslers’ plan to sell its assets to Fiat, represents roughly $295 million of Chrysler’s nearly $6 billion in creditors. They had shot to prominence after President Barack Obama called them “speculators” and said he “does not stand with them.” The Non TARP lenders lost their first major member, Perella Weinberg Partners immediately after Obama’s criticism.
This nonconformist group appealed for a modification in the bidding process of selling Chrysler’s assets to make it more competitive. It said that Chrysler’s existing scheme of things were "designed to prevent, not encourage, competitive bidding." They also called the accelerated timetable for the bidding and subsequent sale process an "absurdity."
Thomas E. Lauria, a partner at the law firm White & Case that represents the group, said “After a great deal of soul-searching and, quite frankly agony, Chrysler’s non-TARP lenders concluded they just don’t have the critical mass to withstand the enormous pressure and machinery of the U.S. government.”
The back tracking of this group removes a vociferous coalition of opposition to the sale of Chrysler’s assets to Fiat and represents a moral victory for the Obama administration
Chrysler’s Plans on course
With a major stumbling block out of the way, Chrysler’s proposed reorganization plan may well see the light of the day pretty soon. The Auburn Hills, Michigan based automaker intends to shift some key assets into a new entity which will be co-owned by the United Automobile Workers union, Fiat and the United States and Canadian governments.
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