OppenheimerFunds has stopped fighting the proposed Chrysler bankruptcy plan. A week after President Obama attacked the "small group of speculators", which includes Oppenheimer Senior Floating Rate co-manager Joseph Welsh along with some hedge funds, for not bowing to the proposal, the New York City-based MassMutual subsidiary reversed course, releasing a statement withdrawing "from the Chrysler Non-TARP Lenders Group" and declaring support for the U.S. Bankruptcy Court's decisions.

"Given the reduced number of senior creditors willing to continue to pursue an alternative to the Federal Automotive Taskforce's proposed settlement, OppenheimerFunds has determined that the senior creditors can no longer reasonably expect to increase the recovery rate on the debt they hold by opposing the Taskforce's restructuring plan," the statement reads.

OppFunds first released a statement on the situation on April 30, and The Wall Street Journal later identified Welsh's fund's involvement (see MFWire, 5/1/2009 and 5/4/2009).

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Company Press Release

OppenheimerFunds, Inc. shares the goals of all Chrysler stakeholders seeking to strengthen the automaker. At all times, OppenheimerFunds has balanced this objective with our fiduciary duty to the mutual funds we manage and their thousands of individual shareholders.

Given the reduced number of senior creditors willing to continue to pursue an alternative to the Federal Automotive Taskforce’s proposed settlement, OppenheimerFunds has determined that the senior creditors can no longer reasonably expect to increase the recovery rate on the debt they hold by opposing the Taskforce’s restructuring plan. Therefore, OppenheimerFunds has withdrawn from the Chrysler Non-TARP Lenders Group and will adhere to the determinations of the U.S. Bankruptcy Court. Contact/Attribution: Bruce Dunbar, OppenheimerFunds, Inc. 212.323.0291 

Edited by: Neil Anderson, Managing Editor


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