Chrysler holdout creditors give up court challenge [View All]

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Source: Detroit News

Friday, May 8, 2009
Chrysler holdout creditors give up court challenge
Gordon Trowbridge and David Shepardson / Detroit News Washington Bureau


Washington --In a major boost for Chrysler's chances of emerging from bankruptcy in the coming weeks, dissident creditors said Friday they would give up their court fight against the automaker's bankruptcy reorganization plan.

"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," Thomas Lauria, a lawyer for the holdout lenders, said in a written statement.

Lauria's statement said the lenders would drop their fight in U.S. Bankruptcy Court against Chrysler's plan, but they did not agree to a U.S. Treasury proposal, OK'd by most of the company's secured lenders, that would give them roughly 29 cents for every dollar of debt they hold.

The move came after two of the largest holdout creditors, OppenheimerFunds and Stairway Capital Management, withdrew their objections Friday. It is likely to make it even easier for the company to win approval of a bankruptcy plan constructed by Chrysler, alliance partner Fiat SpA and the Obama administration. And it's a victory for Obama and Michigan elected officials who had lashed out at the holdout lenders, calling them "vultures" and "speculators" who put their financial interests ahead of thousands of workers.

Read more: http://www.detnews.com/article/20090508/AUTO01/905080433/Chrysler-holdout-creditors-give-up-court-challenge

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Article was posted at 1:08pm EDT.