Appeals court stalls Chrysler case
Posted on: Wednesday, 3 June 2009, 06:55 CDT
A court in New York ruled Chrysler debt holders can plead their case for a full return on investments, stalling the automaker's sprint through bankruptcy.
A group representing pension funds from Indiana holding $42 million in secured debt claim their rights would be violated by the terms of the sale approved in bankruptcy court, The New York Times reported.
The U.S. government and Chrysler have sought to get through bankruptcy as quickly as possible to steer away from any negative image that could rattle car buyers and drive down the company's value. U.S. Bankruptcy Judge Arthur Gonzalez ruled Sunday that Chrysler could proceed with a sale of most of its assets.
But the U.S. Court of Appeals for the Second Circuit said late Tuesday pension fund officials could argue their case Friday.
Fiat of Italy, lined up as a major buyer for Chrysler's assets, has the option to back away from a deal if it does not close by June 15, the newspaper said.
Source: United Press International
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