IN Pension Funds Won't Get Chrysler Case Moved to
District Court
May 27, 2009 (PLANSPONSOR.com) - In a second legal
defeat, a U.S. federal judge denied a request by a group of
Indiana public funds to delay bankrupt automaker Chrysler
LLC's sale hearing and remove the bankruptcy case to district
court.
Reuters reports that on Tuesday, U.S. District
Judge Thomas Griesa denied a motion by The Indiana State
Teachers' Retirement Fund, Indiana State Police Pension
Trust, and Indiana Major Moves Construction Fund that the
government did not have the authority to provide funds to
Chrysler for its proposed sale. Griesa also denied a
request to prevent Chrysler's scheduled sale hearing in
bankruptcy court on Wednesday from going forward.
U.S. Bankruptcy Judge Arthur Gonzales previously
denied the funds' request to halt the asset sale to
Italy's Fiat Group SpA (see
Indiana Pension Plans Lose Shot at
Blocking Chrysler Asset Sale
).
Griesa said that once the bankruptcy judge rules on
Chrysler's sale, the objecting parties should have a
"fair" opportunity to appeal that decision, according to
Reuters. He also issued an order that said the bankruptcy
court was able to interpret non-bankruptcy statutes such
as the Emergency Economic Stabilization Act of 2008,
which established the Troubled Asset Relief Program
(TARP).
"At this late stage, when the Bankruptcy Court is
nearing the completion of its work, it would be
disruptive to remove the issues from a bankruptcy judge
who has the background and is ready to complete his
work," Griesa wrote, according to the new report.
State Treasurer Richard Mourdock says the state
cannot allow its "retired police officers and teachers to
be ripped off by the federal government." The proposed
restructuring seeks to pay billions of dollars to
unsecured Chrysler creditors, while paying secured
creditors only 29 cents on the dollar (see
IN State Treasurer Says Pension Funds
"Ripped Off" by Chrysler Bankruptcy
).
Rebecca Moore
editors@plansponsor.com