Chrysler Group LLC has proved it’s of sufficient financial caliber to be a Duke Energy Indiana customer, saying the utility has finally refunded a $2.5 million security deposit that was used to ensure electric service at its Kokomo transmission plant following the automaker’s 2009 bankruptcy.
Chrysler filed a complaint with the Indiana Utility Regulatory Commission on July 5, saying Duke Energy “is the only public utility in North America still holding a security deposit from Chrysler.”
The automaker complained Duke resisted returning the $2.5 million deposit even after its finances improved, including 32 months of a “clean payment history.” Chrysler attorney Todd Richardson, of Indianapolis law firm Lewis & Kappes, argued that Duke was taking a “draconian” approach in its deposit rules.
He also noted that Chrysler added nearly 1,000 jobs at Kokomo since the 2009 bankruptcy filing. The plant employs about 3,500.
In a filing with the commission late last month, Chrysler said that Duke had refunded the seven-figure deposit, plus an undisclosed amount of interest, “upon review of Chrysler’s most recently published financial reports and further discussions with Chrysler."
The automaker posted a second-quarter profit of $346 million versus a loss of $370 million in the same quarter last year, when it paid off $551 million in federal loans.
“Chrysler reported its second-quarter results after its IURC filing was made, and the company has demonstrated a strong financial trend. Based on its performance, we agreed to fully refund the company’s security deposit,” said Duke spokeswoman Angeline Protogere.
Chrysler filed Chapter 11 bankruptcy reorganization in April 2009 and agreed to sell most of its assets, including its Kokomo transmission manufacturing factories, to a new entity partly owned by Italy’s Fiat SpA. As a result, according to Chrysler's complaint, Duke said it would regard Chrysler as a new customer and demanded a security deposit.
Duke had responded that it was simply using a deposit policy designed to minimize overall costs to all its customers.
“Duke Energy retains its right to request and obtain future customer deposits from Chrysler should they become warranted, and Chrysler retains its right to contest any future requests for customer deposits,” according to Chrysler’s recent filing withdrawing the complaint.
“Chrysler Group is pleased this matter has been resolved. Our company is achieving great success with our new products and Chrysler Group’s plan to invest more than a billion dollars in its Kokomo operations is strong indication of our financial performance and commitment to economic development in the state of Indiana,” said Chrysler spokesman Michael Palese.
Chrysler said it has $12.1 billion of cash on hand.