Chrysler creditors back down on breakup

NEW YORK, May 8 (UPI) -- Lenders who favored liquidation of U.S. automaker Chrysler have given up the cause of forcing a sale to break up the company, the lenders' attorney said.

"It got to the point where it was the collective decision that there was insufficient critical mass to make this fight," attorney Glenn Kurtz of White & Case said, CNNMoney.com reported Friday.

The group was comprised of smaller lenders that were owed about $295 million. But, the group disbanded after OppenheimerFunds Inc., owed $100 million, and private equity Stairway Capital backed down.

"The fact simply is ... our group has become too small to have a voice within the bankruptcy," Stairway said in a statement.

In total, Chrysler owes $6.9 billion to creditors, including JPMorgan Chase, Citigroup Inc., Morgan Stanley and Goldman Sachs, four firms that previously agreed to accept $2.25 billion for the assets. Smaller creditors, however, held off on the agreement.

The government's restructuring plan includes United Auto Workers ending up with 55 percent of the company with Italian automaker Fiat taking 35 percent. The U.S. and Canadian governments, which have loaned Chrysler billions in emergency aid, would own 10 percent.