The U.S. Court of Appeals for the Second Circuit in New York City has agreed to hear the State of Indiana’s objections to Chrysler’s bankruptcy proceedings, according to The Detroit Bureau. The State of Indiana believes that the quick bankruptcy many believe is essential to Chrysler’s future viability is leaving secured lenders like itself with an unfair amount of repayment.
The State of Indiana holds less than one percent of Chrysler’s debt, and believes that the projected 29 percent repayment of its debt is unfair. The appeals court will hear Indiana’s objections next week, but The Detroit Bureau believes that the bankruptcy will proceed quickly despite the objections, and the sale of Chrysler to Fiat will not be affected.
Indiana has a legal right to be heard in the appeals court, even though its objections will most likely be shot down. If a creditor that holds just one percent of Chrysler’s debt can stall the proceedings by a few days, what’s keeping other upset creditors from doing the same thing out of spite and hurting New Chrysler’s hopes for post-bankruptcy survival?