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Chrysler Sale Order Appeals -- growing by the minute

posted by Stephen Lubben

The notices of appeal are coming fast and furious now.  But some of the appeals are filed by parties of dubious standing.  Are the Center for Auto Safety or Public Citizen (founded by noted bankruptcy commentator Ralph Nader) really "persons aggrieved" by the sale order?  There are also some individuals on this appeal that might have standing, although the extent of this group's participation in the sale hearing was filing a "me too" joinder to another objection.

And then there is the (unofficial) "Committee of Consumer-Victims of Chrysler LLC."  The individual members of the committee can probably appeal, but I doubt the committee quo committee has any standing, given it was never appointed by the bankruptcy court.  See §1109(b).

On the other hand the appeal by an individual tort plaintiff, who is also a member of the creditors committee, does not suffer from any apparent standing problems.  But the arguments she advanced against the sale motion, including the old favorite "sub rosa plan" argument (don't get me started), and an argument that §363(f) only applies to "in rem" interests, despite the contrary holding in TWA, don't strike me as persuasive.

I was not persuaded by the Indiana Pension Funds either, but it strikes me that this tort plaintiff appeal and the Indiana appeal are the ones to watch.

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As one of the attorneys who filed the appeal by the "tort victims and consumer organizations" I would note that it is on behalf of three individuals with current claims (and we raised the textual argument re 363(f) not including "claims" while 1141(c) does, when you have an appropriate plan). The consumer organizations in large part addressed future claims, which they as organizations have standing to raise, where a current tort victim would be possibly challenged. Regardless, the Order below granted standing, and specifically cited the Consumer Groups, giving them arguable standing.

You might link to our brief, which raises two very serious questions about the limits of 363(f).

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