Chrysler, Fiat Sale Put on Hold!

Chrysler, Fiat Sale Put on Hold!

Richard Mourdock

Chrysler, Fiat Sale Put on Hold!

At the same time Chrysler LLC was supposed to be proceeding with its sale to Fiat SpA on June 5th as approved by the U.S. Bankruptcy Court in New York, objecting creditors will be arguing their case yet again in the U.S. Court of Appeals for the Second Circuit in New York City.

The appeal was expected from the State of Indiana, which holds a miniscule portion of Chrysler debt, less than 1%, in retirement funds, and the outcome will likely be the same — the Chrysler sale will proceed some time next week.

“We are pleased the Court of Appeals has agreed to hear our arguments,” explained State Treasurer Richard Mourdock. “As we have stated from the beginning, Indiana retirees and Indiana taxpayers have suffered losses because of unprecedented and illegal acts of the federal government.”

In the Bankruptcy Court decision of Judge Gonzales, he cited Congressional laws going back to the 19th century and their subsequent revisions, to dismiss dissident bondholders’ claims. Simply put, the Chrysler sale decision revolves around basic and well-known fundamental principles of bankruptcy law.

Under the decision, Fiat will get the assets related to the research, design, manufacturing, production, assembly and distribution of passenger cars, trucks and other vehicles, including prototypes, under brand names that include Chrysler, Jeep and Dodge.

The Chrysler case has moved exactly along the lines that members the U.S. Treasury’s Auto Task Force outlined in a background briefing to media on April 30th when President Obama made the restructuring announcement and Chrysler LLC filed for court protection. Pundits who said it couldn’t be done swiftly have been proven wrong thus far.

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