Chrysler creditors committee approved to pursue claims against Daimler

By Alice Popovici

New York, Aug. 13 - Chrysler LLC's official committee of unsecured creditors received court approval to pursue fraudulent transfer claims against Daimler AG and related parties, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The creditors had been asking permission to prosecute potential claims against Daimler, that would "hold Daimler responsible for the billions of dollars in assets stripped from Chrysler," according to the previously filed motion.

The committee had said its proposed complaint asserts claims against Daimler and two of its affiliates for whit it believe is intentional and constructive fraudulent transfer, as well as claims against Daimler and four former Chrysler directors for breach of fiduciary duty.

According to the motion, the potential claims arise out of a series of transactions engineered by Daimler in 2007, "which stripped Chrysler of its most valuable assets for grossly inadequate consideration."

Daimler had acquired Chrysler in 1998.

The committee noted that the court previously approved a settlement that called for a broad release of Chrysler's claims against Daimler.

However, the committee was given two months to investigate its potential claims against Daimler and decide which ones have merit before the releases take effect.

Chrysler, an Auburn Hills, Mich.-based automotive company, filed for bankruptcy on April 30. Its Chapter 11 case number is 09-50002. Following the sale of Chrysler, the company continuing in bankruptcy is now known as Old Carco LLC.

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