However, the attempt to gain support from all the creditors was unsuccessful. About 20
financial firms including Oppenheimer Funds and Stairway Capital, who collectively held
US$1 billion, declined to agree to the terms of the proposed debt restructuring. Analysts
opined that the creditors might be better off after bankruptcy filing and liquidation of
Chrysler’s assets. They also opined that, in case of a bankruptcy filing by Chrysler, the creditors
would have no choice but to accept the US$2 billion offered by the U.S. Treasury.
The U.S. government later offered the creditors another US$250 million, which made the
total offering US$2.25 billion. However, the deal did not materialize. Criticizing the creditors,
President Barack Obama said, “A group of investment firms and hedge funds decided to hold
out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody
else would make sacrifices and they would have to make none. Some demanded twice
the return that other lenders were getting. I don’t stand with them.”