Chrysler LLC fired back at
Indiana Treasurer Richard Mourdock yesterday, saying his objection to the way the
Michigan-based auto maker’s Chapter 11 bankruptcy proceeding is being handled could
lead to its liquidation.
Mourdock, who oversees pension
funds for state teachers, police officers and construction workers, said in a
May 20 statement that Chrysler’s plan to emerge from bankruptcy would “rip off”
Chrysler plans to sell the
vast majority of its assets to a group led by
new company, leaving behind many of the liabilities and costs that had sent it
into bankruptcy protection. A sale hearing is scheduled for tomorrow, and the
deal is expected to close about 30 days later.
The Indiana State Teachers
Retirement Fund and Indiana State Police Pension Trust, along with the Indiana
Major Moves Construction Fund, filed an objection to the proposed sale. They
charge that the deal gives preferential treatment to other stakeholders in the
case and ignores the needs of Chrysler’s secured lenders.
examiner be appointed to look at Chrysler’s business decisions and that the
company be put in the hands of a trustee who can act independently of the
Attorneys for the funds will
present their objections today in court.
In a statement issued
yesterday, Chrysler said it believes Mourdock’s request would lead to the
company’s liquidation and the loss of more than 4,000 jobs in
lead one to wonder if his motives are financial or political,” Chrysler said in
about $2 million under the current terms, which 98 percent of creditors have
accepted, the company said.
administration has changed long-standing investment rules in the bankruptcy
proceedings, causing the police pension fund to lose $147,400 and the road
construction fund managed by Mourdock’s office to lose $896,000. The teachers
fund has pegged its losses at about $4.6 million.
allow our retired police officers and teachers to be ripped off by the federal
government,” Mourdock said in the statement. “The Indiana state funds suffered
losses when the Obama administration overturned more than 100 years of
established law by redefining ‘secured creditors’ to mean something less.”
A bankruptcy judge on May 20
denied a motion from the
funds to delay the proposed sale of Chrysler’s assets, saying the funds’ plan
to challenge the legality of the sale in another court wasn’t enough of a
reason to delay the proceedings.