In the last week of April, President Obama's automotive task force accomplished what few thought possible, convincing long-bickering stakeholders of Chrysler LLC to work out a plan to restructure the troubled automaker. Since creditors didn't approve the plan unanimously, it will be implemented in bankruptcy -- a fact the president himself announced in a high-noon White House speech that may help retire that "No drama Obama" nickname.

"I can report that the necessary steps have been taken to give one of America's most storied automakers a new lease on life," Obama said, with task force leader Steven Rattner and other members of the group arrayed behind him. "Unfortunately, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. I don't stand with them."

-- See related story: What's good for General Motors is good for banks --

Bankruptcy will make the restructuring longer and less predictable than the Obama team had hoped. The task force is optimistic, predicting a 30-to 60-day process. But in any case, it's only Act I in a far larger production.

In Act II, we'll find out how the government's actions with Chrysler will affect the much larger and more important task of reorganizing giant, far-flung General Motors Corp.

And somewhere beyond that lies the answer to an even bigger question: How the terms of the Chrysler and GM deals will influence restructuring and capital raising by industrial companies in the years to come.

Chrysler, the rusty jalopy of the U.S. car industry, was able in a 72-hour span to reach agreements with unions in the U.S. and Canada, not to mention a majority of the secured lenders who just days earlier had threatened to force the company to liquidate.

Those concessions put Chrysler in position to complete an alliance with Fiat SpA and qualify for up to $6 billion in additional government assistance.

The cramdown would not have been possible without Washington's clout. The government paid a steep price for its seat at the table, providing Chrysler and GM with nearly $20 billion to fund operations since December. But once assembled, the task force left little doubt about who was in charge or how the turnarounds would proceed.

Mixing politics with a painful restructuring of one of the nation's largest -- and most heavily unionized -- industries appeared to some a recipe for disaster. Indeed, in the task force's early days, some creditors appeared skeptical about threats that the White House would allow either GM or Chrysler to fall into Chapter 11. Unions have fared miserably inside bankruptcy in recent years, with companies using the Bankruptcy Code to tear up contracts, cut benefits and dump pensions.

To wit, bondholders at GM initially demanded new, government-backed securities as a condition for surrendering their debt. And secured lenders at Chrysler, estimating that they could recover much of what they were owed in the event of a liquidation, initially demanded 40% of the company's equity in return for erasing less than half of the $6.8 billion in loans they held.

In Chrysler's case, most lenders settled for much less. Facing an April 30 deadline for Chrysler to be cut off from the government trough, a group representing a majority of the debt last week agreed in principle to forgive all but $2 billion of what is owed in exchange for less than 10% of the company.

According to sources these lenders, most of them banks (including J.P. Morgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley), bowed to political pressure as well as concerns that the U.S. Treasury would use debtor-in-possession financing to trump their secured claims in court and leave them with significantly less recovery.

But a smaller group of lenders, including some hedge funds, held out for more. Whether the holdouts -- which Obama called "a small group of speculators" -- will fare any better in court remains to be seen. Some sources think the company will be able to use the Chapter 11 filing to bring the laggards into line and also to break franchise agreements with underperforming dealers. With a majority of lenders, unions and the government on board, the likelihood of an extended or contentious stay in Chapter 11 or even a liquidation has been reduced.

The majority creditors accepted what at first blush appears to be a lousy deal. They traded their secured claims for a small minority stake even as the United Auto Workers union was pledged a majority of the company's equity in return for swapping out unsecured claims on cash to fund a retiree healthcare fund, along with other labor concessions. "The takeaway is that the government is serious," a restructuring source working with an industry participant says. "And when they are serious, it is foolish to argue with them."

The message is unlikely to be lost on stakeholders at General Motors, which faces its own June 1 deadline to secure cuts or be cut off from funding. In fact, many suspect the government staggered the deadlines to use the smaller Chrysler to prove its resolve, willing in the worst-case scenario to see Chrysler disappear if that could help eventually save General Motors.

GM is a very different company from Chrysler. Far more global, it is trying to bring down its North American costs while at the same time sell multiple brands on two continents and find investors to fund a turnaround at its European affiliate.

But like Chrysler, GM is at the government's request seeking draconian cuts from a group of creditors who have been left to choose between taking a disproportionate haircut or testing their luck in bankruptcy.

In GM's case, bondholders have been offered about 10% of the post-restructuring company's shares for surrendering the $28 billion they are owed. The UAW healthcare trust, meanwhile, has been offered $10 billion in cash and 39% of the company's equity in return for its $20 billion in obligations.

A group of bondholders has criticized what they see as "a blatant disregard of fairness" in "using taxpayer money to show political favoritism of one creditor over another."

But they have few good options.

It is unclear whether the government's threats will work as well on the thousands of GM bondholders, including institutional and retail investors, as they did on Chrysler's banks. Some, including bond analyst Kip Penniman of KDP Investment Advisors Inc., have predicted GM is unlikely to get the support of 90% of bondholders, as the government has requested, making a Chapter 11 filing likely.

But if nothing else, the Chrysler example frames the debate for bondholders, the restructuring expert says. "Bondholders are saying 'Let's talk about this,'" the source says. "Chrysler's banks found out Steve Rattner is not in the mood for talks."

That the government has applied a heavy hand in dealing with the automakers seems beyond debate. The long-term implications of these actions, however, will take years to fully understand. Supporters of the government's actions will point to the jobs saved and industrial base maintained, not to mention the avoidance of what could be immense government outlays should an automaker's pension or healthcare funds collapse.

Some, though, wonder if other unionized industrial sectors will find their long-term borrowing costs rising in future years because of newfound ambiguity about creditors' rights in the event of a reorganization.

Peter Kaufman, restructuring expert and president of New York investment bank Gordian Group LLC, worries that what the government has done so far sets a terrible precedent for restructurings. "They are standing our bankruptcy law on its ears by giving preference to unsecured lenders like unions over senior secured creditors," Kaufman says. "This is not a restructuring, it is a nationalization."