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Tuesday, May 26, 2009

Ind. Gov't. - Yet more on: "Pension Funds Object to Chrysler Sale, Want Trustee"

Updating this morning's entry, from the WSJ this afternoon:

NEW YORK (Dow Jones)--A U.S. district judge on Tuesday declined to hear a challenge by a group of Indiana pension funds that Chrysler LLC's sale is unconstitutional because of the U.S. government's heavy involvement in the deal.

At a hearing Tuesday, U.S. District Judge Thomas Griesa in Manhattan refused to move the Chrysler case from bankruptcy court to the district court, allowing a sale hearing to proceed as planned on Wednesday.

The judge, who announced his decision from the bench, also rejected a motion to stay the hearing. The judge is expected to put out a written opinion outlining his decision later Tuesday.

"There should be a fair opportunity to appeal," the judge said, indicating he wouldn't like to see an "exorbitant" bond required if the bankruptcy court approves the sale and it is challenged on appeal.

Chrysler has indicated in court papers that anyone who challenges the sale on appeal should be required to post a $2 billion bond.

The pension funds - the Indiana State Teachers Retirement Fund, the Indiana State Police Pension Fund and the Indiana Major Moves Construction Fund - own about $42.5 million of Chrysler's $6.9 billion in secured debt.

[Updated] See also this story from the IBJ.

Posted by Marcia Oddi on May 26, 2009 05:37 PM
Posted to Indiana Government