Arguments in favor of anonymity for the Non-TARP Chrysler lenders never particularly convinced us. Whatever else may be true about the bankruptcy process, it should be a public one. It is interesting, however, that what was once 20 members, became 5 once disclosure became an issue. If there is an argument in favor of anonymity it is likely buried in that bit of trivia. Clearly, there is a chilling effect at work here. What does it say about the integrity of the process that holdouts who believe they are being treated unfairly, and are using legal means to lodge their protest scatter for cover when their exposure is threatened. Again: When it became clear that the exercise of their legal dissenters rights would be made public, 15 members withdrew their objections. Nothing about the fundamentals of the deal has changed in the last 48 hours.
Who is left standing?
The members include three funds associated with Schultze Asset Management; Stairway Capital Management; Oppenheimer, which holds debt in two funds; Group G Partners, which has holdings in two funds; and Foxhill Capital Partners.
By opposing the Obama administration's out-of-court debt restructuring plan, this group of holdout creditors has found themselves in the national spotlight. Last Thursday, as Chrysler filed for bankruptcy protection in New York, President Obama criticized the holdouts as "speculators," even as the creditors argued that they were being treated unfairly under the government's plan.
If you needed a clear demonstration that this process is tainted, we believe you now have it. Given this, you should be very wary of anyone who calls this result a "victory."
Meet The Chrysler Holdouts [DealBook]