Appeal to block sale of Chrysler’s assets

For those of us who thought that the sale of Chrysler’s assets would go smoothly, then think again. It seems as though a federal court has agreed to hear an appeal to block the sale of the struggling automakers assets. This move could certainly slow down Chrysler’s exit from bankruptcy proceedings.

The appeal was made by a coalition of Indiana pension funds, who hopes to be able to block the sale of a number of Chrysler’s assets to a group, which includes automaker Fiat. The Washington Post reports that the hearing will take place at the U.S. Court of Appeals on Friday.

These pensions funds holds almost $42 million of Chrysler’s $6.9 billion in secured debt, the appeal states that the terms of the sale to the group violate their rights as secured lenders, and that it limits them to be able to recover all of the investment from the new company. This appeal now throws uncertainty on Chrysler’s future, which the Obama administration has had much to do with.