Judge orders holdout Chrysler lenders to reveal their names
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Most of Chrysler‘s dissident lenders, who were lambasted by President Obama last week for failing to go along with a proposed debt restructuring, have been fighting to keep their identities secret.
Today, despite saying that they’ve been threatened with violence for their stance, they lost their bid to keep hiding: U.S. Bankruptcy Judge Arthur Gonzalez in New York ordered the dissidents to publicly reveal their names by 10 a.m. Wednesday.
From Bloomberg News:
Gonzalez said the lenders have no evidence that keeping their identities private would help protect them from threats of violence. The group seeks to block an auction of most company assets to an entity managed by Fiat SpA. Thomas Lauria, a lawyer for the group, told Gonzalez today that the group has been exposed to ‘undue reputational damage, and threats of violence.’ He said criticism of the group was exceptional, because it came from President Obama. Gonzalez said criticism is inherent in any bankruptcy proceeding, and Obama shouldn’t be singled out as an exceptional party given the government’s involvement in Chrysler’s bankruptcy. . . .
Robert W. Hamilton, a lawyer for Chrysler, said that the threats couldn’t be taken seriously, as they were postings on an Internet message board affiliated with the Washington Post. Chrysler filed for bankruptcy protection last week after failing to get all of its debt holders to agree to a restructuring. The holdouts, including some hedge funds, rejected the offer of 33 cents on the dollar for their debt, contending that because their loans were secured by Chrysler’s assets they deserved a bigger payout.
But even before Gonzalez’s ruling today, the dissidents’ ranks were thinning.
From Bloomberg:
A lawyer representing JPMorgan Chase & Co., the largest lender on the $6.9 billion in debt, and other lenders in favor of the deal, said last week the dissidents held about 10% of its value, less than $700 million. Now those still in the group own only about $300 million, the holdouts said in a bankruptcy court filing. Some members have left because things are ‘too hot,’ Lauria said.
-- Tom Petruno