Opposition to Chrysler's tie-in with Fiat appears to be diminishing, after a dissident group of debtors broke up its alliance.
A group of five debtors had formed together to challenge the tie-in in the bankruptcy protection courts, saying it was unlawful.
However, two of the five announced that they were no longer challenging the union of Chrysler and Fiat, forcing the group to disband. The three remaining debtors represented less than 2.8 per cent of Chrysler's $6.9 billion (£4.5 billion) in debt.
White House spokesman Robert Gibbs said: "This is another important and promising step in Chrysler's favor to go through a very quick restructuring and bankruptcy and to very quickly have Chrysler and Fiat emerge together as partners to put a very storied automobile company back on a path toward viability."
Most of Chrysler's debt is held by four large banks - JP Morgan Chase, Citigroup, Goldman Sachs and Morgan Stanley - that have agreed to the Obama administration's debt-restructuring plan.
The large banks had agreed to the administration's offer of a $2 billion (£1.3 billion) cash payment in return for forgiveness of the $6.9 billion (£4.5 billion) debt.
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