Chrysler Sale Challenged, Delay Possible
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A US Court of Appeal has approved the group's request to hear the challenge, a decision which may delay the process all together, at least until the challenge is heard. Arguments will be presented in court on Friday in New York, Autonews reported.
"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," Indiana State Treasurer Richard Murdoch said in a statement on Wednesday.
The group argued that the plan to sell 29 cents on the dollar, according to Chrysler's plan to distribute stock, is an illegal "sub rosa" reorganization plan (secret plan), not allowed under bankruptcy law. Several other groups have joined the Indiana funds, in an attempt to block the sale.
A three-judge panel will judge the case. The three are Chief Judge Dennis Jacobs, Judge Amalya Kearse and Judge Robert Sack. Depending on their decision the American manufacturer will either exit bankruptcy, or risk losing Fiat.
The Italian investors are allowed, according to the agreement, to walk away from the deal after June 15, should common ground not be found. Even if it is unlikely it will get that far, the challenge will most likely postpone the sale, initially agreed upon to take place on Friday.
The bankruptcy process was supposed to be completed in between 30 and 60 days. The first month has already passed.
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