In the Chrysler case, the dissident debt holders disbanded 10 days after the company collapsed, citing political pressure that began when President Barack Obama criticized the group. Evan Flaschen, chairman of the restructuring department at law firm Bracewell & Giuliani LLP, said uncooperative GM bondholders may be less politically vulnerable.
"The story that hasn't been told is, this isn't GM's union retirees versus the bondholders. It's retirees versus other retirees," said Flaschen, who isn't involved in the GM matter. While Chrysler's dissidents lost steam because they were forced to identify themselves and faced public stigma, including alleged death threats, GM's opponents may be harder to criticize, Flaschen said.
GM Chief Executive Officer Fritz Henderson has said the U.S. Treasury allowed the automaker very little flexibility in its negotiations with bondholders. Julie Gibson, a spokeswoman for GM, declined to comment. "We're stuck, we need the white knight," said Gary Thomas, a retired auto mechanic and GM bondholder. "I'm not asking for special treatment, I'm just asking for parity. I just feel like whatever the UAW gets, the bondholders should get."
"Initially, the company said getting bondholders to agree to a debt swap was its best chance for avoiding Chapter 11. But the latest plan is designed to expedite a bankruptcy filling more than to avoid it. As part of the agreement, bondholders pledged not to oppose GM's reorganization in court.
Although the committee supported the deal, a group of dissident bondholders represented by Thomas Lauria, a lawyer for holdouts in the Chrysler case, fought against it. They argued small, individual bondholders were left with no voice as the U.S. Treasury negotiated directly with GM's large institutional bondholders.