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The group is down to nine funds, from the 20 claimed in an April 30 statement, and the face value of their loan holdings has shrunk by about 70 percent, to $295 million from $1 billion. “Each of the Chrysler Non-TARP lenders will lose money for their investors, based on the current proposal,” said Gerard H. Uzzi, a White & Case LLP lawyer who represents the group, in a court filing. None of them hold any credit default swaps or hedges with respect to their holdings of senior debt, Uzzi said in the filing.
U.S. Bankruptcy Court Judge Arthur Gonzalez ordered the disclosure, overruling concerns about death threats and allegations that President Barack Obama’s criticism of their stance would damage the lenders’ reputations. George Schultze, portfolio manager and founder of Schultze Asset Management LLC, didn’t immediately return a call and e-mail seeking comment yesterday. Neil Weiner, Senior Managing Member of Foxhill Capital Partners, declined to comment. OppenheimerFunds John Rijo, a principal of Uniondale, New York-based Stairway, and Jack Brown, a senior analyst at OppenheimerFunds, a unit of Massachusetts Mutual Life Insurance Co., didn’t immediately return phone calls seeking comment. Group G Capital Chairman Geoffrey Gwin declined to comment.
OppenheimerFunds, based in New York, said in a statement on April 30 that it rejected the offers because the government “unfairly” demanded that the fund’s shareholders make greater sacrifices than were being asked of unsecured creditors. “Our holdings in secured Chrysler debt are entitled to priority in long-established U.S. bankruptcy law, and we are obligated to our fund shareholders to support agreements that respect these laws,” the company said in an e-mail. The dissidents are part of a group of Chrysler’s secured lenders holding loans with a face value of $6.9 billion, which Obama plans to pay $2 billion to free up assets for a sale to Italy’s Fiat. That’s about 29 cents on the dollar. Chrysler debt was trading at 27 cents to 28 cents on the dollar as of May 5, according to two people familiar with the trades. CarCo Lenders
The group, which refers to itself also as the CarCo Lenders Group, has hired White & Case to pursue various options including probes of Chrysler and any issues related to its restructuring, and the formulation of a plan of reorganization. White & Case will seek to have its legal fees for work with the group paid out of Chrysler’s bankruptcy estate, court documents said. White & Case has also represented other lenders who withdrew from the group, lawyers said in court documents. There are other lenders who haven’t agreed to the deal afforded by Chrysler’s Fiat deal, and also didn’t join the Non- TARP group “as a consequence of concerns stemming from publicity” around the case, Uzzi said in the filing. The group, also blamed for tipping Chrysler into bankruptcy on April 30 by refusing a deal that would have given them about 28 cents on the dollar for their debt, has fluctuated since last week, said the group’s lawyer, Thomas Lauria, in a May 4 interview.
Northwest Ruling Gonzalez compared his ruling to a 2007 decision by U.S. Bankruptcy Court Judge Allan Gropper, who forced a group of hedge funds that invested in Northwest Airlines Corp. to fully disclose the size of its members’ stakes in the carrier. The Chrysler Non-TARP Lenders are as follows, according to the filing: Schultze Master Fund Ltd. of Purchase, New York; Arrow Distressed Securities Fund at the same Purchase address; Schultze Apex Master Fund, at the same address; Uniondale, New York-based Stairway Capital Management II L.P; Group G Partners LP, based in New York; GGCP Sequoia L.P., at the same New York address; Oppenheimer Senior Floating Rate Fund, in New York; Oppenheimer Master Loan Fund LLC, at the same New York address; and Foxhill Opportunity Master Fund LP, based in Princeton, New Jersey. The case is In re. Chrysler LLC, 09-50002, U.S. Bankruptcy Court, Southern District of New York (Manhattan)
To contact the reporter on this story: Tiffany Kary in U.S. Bankruptcy Court in New York at tkary@bloomberg.net. Last Updated: May 7, 2009 00:01 EDT
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Chrysler’s bondholders are whining about Obama’s deal. Don’t listen to them.
]]>Who the fuck do you think you’re dealing with? We’ll have the IRS audit your fund. Every one of your employees. Your investors. Then we will have the Securities and Exchange Commission rip through your books looking for anything and everything.
Faced with these threats the investor backed down taking a settlement much less appealing that what could have possibly been attained through bankruptcy. A government official is dictating terms of how to operate private companies. They are forcing investors to make decisions that do not match with their fiduciary duties to investors. I encourage all of you to please read the following links and make your own decisions on the validity of the claims.
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We caught the train to Chicago Friday for my second ever hockey game (first professional hockey game). The Chicago Blackhawks won against the New Jersey Devils, and quality fans from both sides packed the United Center. It was a good game, although Chris and I don’t really understand the rules of hockey that well.
Here’s what makes it a good game for us:
1) Stadium food like fries, burgers, hot dogs, nachos, etc.
2) Fist fights between hockey players, including one that lasted for five minutes and stretched the length of the ice with all three referees just watching
3) A referee got hit in the head with a hockey puck and had to leave the game
4) Dan Aykroyd opened the game, which was full of Blues Brothers references
5) Fist fights in the stands between white trash Blackhawks fans and Devils fans.
We stayed at the Hotel Burnham, which we would highly recommend. Also, before the game, we met up with some of Chris’ friends from the Chicago Board of Trade and had after-work drinks at a bar filled with traders. They were all fun Irish guys, so we fit right in.
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