Two more Chrysler creditors drop objections

OppenheimerFunds and Stairway Capital Management, two of the Chrysler debt holders opposed to the proposed Chrysler bankruptcy plan, have dropped out of the Chrysler Non-TARP Lenders Group and withdrawn their objections.

In a statement released this morning, Bruce Dunbar of Oppenheimer said, “OppenheimerFunds, Inc. shares the goals of all Chrysler stakeholders seeking to strengthen the automaker. At all times, OppenheimerFunds has balanced this objective with our fiduciary duty to the mutual funds we manage and their thousands of individual shareholders.

“Given the reduced number of senior creditors willing to continue to pursue an alternative to the Federal Automotive Taskforce’s proposed settlement, OppenheimerFunds 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. Therefore, OppenheimerFunds has withdrawn from the Chrysler Non-TARP Lenders Group and will adhere to the determinations of the U.S. Bankruptcy Court.”

In a separate statement, Stairway said, “The fact simply is, however, our group has become too small to have a voice within the bankruptcy.”

Ever since Judge Arthur Gonzalez ordered the creditors to reveal their identities, the group has been shrinking in both numbers and debts represented as members withdrew, fearing reprisals. The defection of Oppenheimer and Stairway could signal the end of organized opposition to the Chrysler plan favored by the Obama Administration.