Karma, it’s a beautiful thing!

If you wait long enough karma has a way of sorting things out. Tuesday a federal bankruptcy judge gave the small group of holdouts that drove Chrysler into bankruptcy two major setbacks and paved the way for the Chrysler/Fiat merger to go through.

The judge approved the bidding procedures that the Obama administration and the company had requested. The extra drops of blood the holdout creditors were hoping to get by forcing Chrysler into bankruptcy seem to be slipping away. From the NY Times:

The decision by the federal bankruptcy judge, Arthur J. Gonzalez, is a setback for a group of Chrysler creditors who have argued that liquidation of the company or some other transaction could yield greater value. These lenders, primarily investment firms, have said that the plan for the Fiat transaction ran afoul of bankruptcy law and would chill efforts by others to produce competing, potentially higher bids.

The judge earlier in the day had ruled for the disclosure of the identities of the Chrysler creditors which had claimed that revealing the names might lead to retaliation. In other words “we know that we are awful, pathetic people and our behavior effects the livelihoods of millions of people but hey were trying to make a couple of extra bucks here! You can’t really expect us to do this type of thing in public!?”

While owning less than 5% of the $6.9 Billion Chrysler debt these “vultures”, as John Dingell called them, held out for more money and it may end up biting them in the ass! And just in case you were wondering, here is the list of creditors as listed on Bloomberg:

The Chrysler Non-TARP Lenders are as follows, according to the filing:

Schultze Master Fund Ltd. of Purchase, New York;

Arrow Distressed Securities Fund at the same Purchase address;

Schultze Apex Master Fund, at the same address;

Uniondale, New York-based Stairway Capital Management II L.P;

Group G Partners LP, based in New York;

GGCP Sequoia L.P., at the same New York address;

Oppenheimer Senior Floating Rate Fund, in New York;

Oppenheimer Master Loan Fund LLC, at the same New York address;

Foxhill Opportunity Master Fund LP, based in Princeton, New Jersey.