Last Updated 4/30/09

Chrysler, LLC
Chrysler, LLC, filed for bankruptcy pursuant to Chapter 11 of the Bankruptcy Code on Thursday, April 30, 2009. CNN Money reports that a deal has been reached to combine the company with Fiat in order to allow Chrysler to stay in business.

The bankruptcy filing, which was made in bankruptcy court in New York, comes after some of Chrysler's smaller lenders refused a Treasury Department demand to reduce the amount of money the troubled automaker owed them.

In remarks at the White House, President Obama said that the bankruptcy filing is not a failure for the company but "one more step on the path to Chrysler's revival."

Obama vowed the bankruptcy process would be quick, efficient and controlled. A senior administration official predicted it would be completed within 30 to 60 days. The combination with Fiat is also due to close during that period of time. While this appears optimistic, it does indicate that a lot of planning has gone into this particular bankruptcy case.

Claims Against Chrysler
All State and Federal Court suits and other claims against Chrysler are now stayed by the bankruptcy filing. All claims must be pursued in Bankruptcy Court. Many claims can be preserved by simply filing a Proof of Claim. Most creditors will receive a Notice of Commencement and a form Proof of Claim by mail.

Personal injury claims against Chrysler will likely be the subject of a separate Bankrupcty Court order specifying the process for pursuing the claim. This will likely involve an informal negotiation process, mediation, then an opportunity to seek permission from the Bankruptcy Court to liquidate the claim in the appropriate State or Federal Court. All allowed claims will be paid pursuant to a yet-to-be-filed Chapter 11 Plan of Reorganization.

David W. Langley. has handled many creditor claims and personal injury claims in large bankruptcy cases, including the K Mart bankruptcy, Levitt & Sons and Winn-Dixie cases. One such case was featured on South Florida's Channel 7 News program 'Help Me Howard'. Call or email us if you need help with a Chrysler claim.

Adversary Claims
Unfortunately, many individuals and businesses who have done business with Chrysler will be caught up in preference claims and other litigation. The Bankruptcy Code attmepts to protect creditors from preferential treatment of 'friendly creditors' by providing that some payments received from the Debtor within 90 days of filing are preferential and must be paid back. Fortunately, there are many defenses to such claims. Often a claim by the Debtor or other representative party can be resolved quickly without major legal expense. Let us know if we can help defend an adversary claim or proceeding against your small business.

David W. Langley is licensed to practice only in the State of Florida and handles bankruptcy cases in Miami, Hollywood, Fort Lauderdale, Plantation, Pembroke Pines, Pompano,Coral Springs, Deerfield, Boca Raton, Delray and West Palm Beach.

Copyright © 2009 by David W. Langley. All rights reserved.