Chrysler has joined the list of major U.S. companies to be bought and sold with government supervision due to bankruptcy. This time, the buyer is Italian car manufacturer Fiat, which plans to focus the Chrysler brand on environmentally-friendly, fuel-efficient cars. The deal was declared a success by the Treasury Department because it has essentially settled the bankruptcy process and puts the new Fiat-Chrysler alliance in a position to achieve financial viability.
The conditions that brought about this merger have problems. For one thing, some of the government bailout money came from the Troubled Asset Relief Fund (TARP), which was intended for banks, not auto-makers. Also, certain shareholders in Chrysler’s assets will not benefit as handsomely from the merger as others. But the most troubling condition of the deal relates to victims of faulty vehicles.
Before the sale was complete, it was agreed that Fiat would not be responsible for the vehicles that were previously sold. Product liability claims would have to be settled with the leftover assets not purchased by Fiat. Obviously, these assets are not very valuable, or else Fiat would have bought them. So it is unlikely that any payments for faulty vehicles would be available to those seeking recompense in court. Consumer groups have tried to contest this condition of the sale, but to no avail.
Michael E Seelie, board certified civil trial attorney, represents injured people in Jacksonville, Florida.
