Monday, May 4, 2009

Chrysler Bankruptcy: Death Threats and Illegal Sales

BNN reported today that Chrysler's secured bold holders have been receiving death threats after being vilified by the government last week a fact also reported by the Detroit News. cases have been referred to the FBI and local police.

The bond holders claim that the sale of assets is patently illegal under banruptcy law. They have filed an objection today, as follows:

"Separate and apart from the lack of due process and any infirmities in the bidding procedures themselves, the Sale Motion should be denied because it seeks approval of a sale that cannot be approved under the Bankruptcy Code. In short, the Court should not permit a patently illegal sales process to go forward. Among other things, the sale proposed by the Debtors constitutes an impermissible sub rosa plan of reorganization that strips the Chrysler Senior Lenders of the protections of section 1129(a) of title 11 of the United States Code (the “Bankruptcy Code”) and improperly attempts to extinguish their property rights without their consent. Further, the sale does not comply with section 363(f) of the Bankruptcy Code and was not proposed in good faith. Indeed, the sale is far from an arm’s length transaction, but rather, is the result of a tainted sales process dominated by the United States government. Under these circumstances, the Sale Motion should be denied."

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