NEW YORK — The group of dissident Chrysler bondholders challenging Chrysler LLC’s government-backed restructuring plans, said Friday that it is dropping its court fight.
The dissolution of the group — at least on an official basis — clears away the largest obstacle standing in the way of Chrysler LLC’s plans to sell the bulk of its assets of Italy’s Fiat Group SpA and could pave the way for the quick exit from bankruptcy protection that the automaker and the federal government desire.
Geoffrey Gwin, principal of the Group G Capital Partners LLC hedge funds, said that after weighing the obstacles ahead and along with the opposition they had faced before, the group’s five remaining members realized that they couldn’t mount an effective legal challenge.
But that doesn’t mean that the deal reached before Chrysler’s Chapter 11 filing — which would exchange the automaker’s total of $6.9 billion in secured debt for $2 billion — has the group’s support.
Thomas Lauria, the group’s lead attorney, said in a statement that the lenders he represented, and others, felt undue pressure from President Barack Obama’s administration to accept the deal.
