Second Circuit Upholds Chrysler Bankruptcy Assets Sale
On Friday, the U.S. Court of Appeals for the Second Circuit approved the sale of most of the assets of Chrysler to Italian automaker Fiat. However, the court of appeals said the deal could not be completed until June 8 or until the U.S. Supreme Court decides not to hear the case. The deal is primarily opposed by a group of Indiana pension funds that acquired $42.5 million in secured Chrysler debt last year. The pension funds argue the deal is unfairly biased towards secured creditors.
In addition to approving the sale of Chrysler's assets, the bankruptcy judge overseeing the Chrysler bankruptcy also ruled that Fiat will not be responsble for any future product liability claims filed by the owners of current Chrysler vehicles. It is believed General Motors will likewise seek the same relief in its bankruptcy proceeding regarding future product liability claims involving vehicles it manufactures before coming out of bankruptcy.
