Indiana Treasurer Richard Mourdock will challenge the U.S. Bankruptcy Court ruling permitting the sale of most of Chrysler LLC to Fiat SpA, according to a statement today by Mr. Mourdock.
The treasurer filed a notice with the U.S. District Court of its plans to appeal on behalf of the $7.8 billion Indiana State Teachers Retirement Fund, the $250 million Indiana State Police Pension Trust and the $2.5 billion Indiana Major Moves Construction Fund.
Mr. Mourdock contends the ruling allowing the sale violated established legal practices in bankruptcy actions.
I am disappointed but not surprised by Bankruptcy Court Judge Arthur J. Gonzalezs ruling regarding the bankruptcy sale of Chrysler, the statement said. The court is determined to rewrite 150 years of law defining secured creditor.
In addition, Judge Gonzalez did not even address the issue of the illegal misuse of TARP funds, the statement said. The TARP statutes clearly provide federal bailout money for financial institutions. Chrysler is not a financial institution and therefore the use of federal TARP funds to leverage its sale to the governments preferred unsecured creditors is illegal.
The teachers fund holds about $32.4 million in Chrysler secured debt, the construction fund holds $8.8 million and the state police fund, $1.3 million.
The law firm of White and Case is representing the treasurer and funds in the case.