• Jun 4, 2009
The state of Indiana has a big problem with Chrysler's bankruptcy proceedings. Indiana state treasurer Richard Mourdock explained that "Indiana retirees and Indiana taxpayers have suffered losses because of unprecedented and illegal acts of the federal government." The home of the Indianapolis 500 has $42 million worth of retirement funds invested in the Pentastar; less than 1% of the $6.9 billion in secured debt owed by Chrysler. Indiana's appeal of the Fiat sale officially puts any deal with the Italian automaker on hold until a resolution has been made.

Veteran bankruptcy judge Arthur Gonzalez couldn't disagree with Mr. Mourdock more, saying ""the Court finds that all relevant standards have been established to grant the relief requested." By "relief," Judge Gonzalez is likely talking about Fiat and its ability to take ownership of Chrysler.

Though $42 million doesn't buy a lot these days, the state has the right to fight the bankruptcy. Whether the midwestern state wins its case is another matter all together.The New York Court of Appeals hearing of the state of Indiana's objection to the Chrysler bankruptcy hearing is widely viewed as little more than a formality. Chrysler's bankruptcy has gone very smoothly thus far, and with the backing of plenty of rock-solid legal types in the White House, it is now looking more and more likely that Chrysler will indeed exit bankruptcy in around 60 days.

[Source: The Detroit Bureau]


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  • 21 Comments
      • 5 Years Ago
      I have to hand it to this Indiana State Treasurer. It takes a lot of nerve to expose what Ohobo and his "zappies" (auto restructuring people) are doing. It also is taking a big risk, and pictures of him look like he's scared indeed. Most others caved in to the new unpublished business laws of the land.
      • 5 Years Ago
      Oops...spit the champagne back into the bottle. Can't afford more until the deal "really" goes thru.
      • 5 Years Ago
      Does Mourdock present an alternative solution for a company that's essentially shrugged, pulled its pockets inside-out, and said "I got nothin'?"

      5,933 unemployment-collecting Chrysler employees would go through $42 million pretty fast.
      • 5 Years Ago
      "Though $42 million doesn't buy a lot these days . . . " Where have you folks been shopping?"

      But seriously, both Throwback and Frank pretty much summed up the situation in clear anc concise terms. Unfortunately, many people will feel the pinch of these actions for many years to come. And the good folks in Indiana are no exception. These are rather unique times which require unique solutions. Who would have thought that two of America's manufacturing stalwalts would find themselves in his situation.

      Thowback said it best suggesting that if Chrysler goes into Chapter 7 bankruptcy then everybody loses everything. And as Frank says now comes the hard part.



      • 5 Years Ago
      What they are asking is: why should their pension fund take much bigger loss than the UAW? Especially when their moneys are secured and the UAW's aren't?

      While UAW President Obama likes to paint the creditors as "greedy opportunistic speculators" the reality is that there are literally billions of (non UAW) pension fund dollars that were invested by various smaller retirement funds that are getting shafted so the UAW can come out of the deal significantly intact.
        • 5 Years Ago
        Go read some of Obama's speaches he made to the UAW even before he was running for Dictator of the USA. Back in 2007, Obama made some very disturbing promises to the UAW.
      • 5 Years Ago
      Obama's union bailout does not respect bankruptcy laws. It's time somebody called him on it.
        • 5 Years Ago
        Clearly the answer is for the government to kick that mafia organization to the curb.
        Reopen Chrysler without all those corrupt worthless mafia people and they should be able to be competitive again.
        • 5 Years Ago
        Your right it doesn't. Mostly because Chrysler had 0% chance of surviving otherwise. The government had to come in and save the day. The only problem with government help is it is like a bunch of mice asking an elephant for help. Somebody is going to get stepped on.
      • 5 Years Ago
      debtor finance
      It's a nice bog.
      Thanks.
      • 5 Years Ago
      Would Indiana rather loose $42million or the jobs of Chrysler employees there?
        • 5 Years Ago
        ChryCo failed one contract, what is to stop it from failing another contract?

        People say that business is about greed. However, if you dig down to the very bottom, business is about trust.

        Also, I am not sure how much ChryCo build in Indiana. I am in Indiana and most factories around me are GM and GM related.
        • 5 Years Ago
        All Chrysler factories are shuttered anyway.
        I say sell off the building and equipment and give the creditors they money. Put a nice memorial plaque where Chrysler headquarters once was.
      • 5 Years Ago
      SHOCK - a Republican granstanding? Who woulda thunk it?
        • 5 Years Ago
        Take your political tripe somewhere else.
        • 5 Years Ago
        Ah, John, I think you're posting to yourself. How are the meds going?
      • 5 Years Ago
      So much for the "Chrysler won't survive bankruptcy" naysayers. Once this is done the hard work of turning around this company begins. That is still in doubt but I wish them (and FIAT) good luck. Hopefully GM's will go as smoothly.
      • 5 Years Ago
      It boils down to this. Some moron in charge of money for several funds (three funds, which include the Indiana State Teachers retirement Fund and Indiana State Police Pension Trust, along with the Indiana Major Moves Construction Fund) bought bonds last August from Chrysler supposedly at 43 cents on the dollar (42.5 million worth) having dreams of a big payoff in bankrupcty, where apparently it has been par for the course for these secured bondholders to rake it in when assets are sold and bondholders paid off.

      The agreement with most of the bondholders was for 29 cents on the dollar, and I think Indiana opted out, so could lose everything in this bankruptcy.

      Though I live in Indiana, I think this guy got what he deserved for gambling with Hoosier's money in such an irresponsible manor, and hopefully gets a pink slip next.
      • 5 Years Ago
      On of those "stalwarts" has already found itself in that postion in the 80's...

      saved by the hand s of the great Lee Iaccoca.

      It is not surprising. It was no unexpected. I just was hastened by the high price of oil.
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