Mourdock halts Chrysler bankruptcy

INDIANAPOLIS (WISH) - A federal bankruptcy judge halted the Chrysler bankruptcy proceedings at the request of Indiana State Treasurer Richard Mourdock.

Mourdock filed suit to stop the Chrysler bankruptcy on behalf of the State Teacher’s Retirement Fund and the State Police Retirement Fund along with the Major Moves Construction Fund. They all own Chrysler bonds and are secured creditors.

"Never did I imagine I would be the sole person fighting the Obama Administration against an automobile bailout. This is not what I want to do. This is not fun, but somebody has to do it so we're going to hold the ground," said Indiana State Treasurer Richard Mourdock.

In bankruptcy proceedings in New York unsecured creditors got a better deal and the Italian carmaker Fiat stands to get a 20% stake in Chrysler without an investment.

Mourdock said it goes against the bankruptcy law. His arguments will lead to a hearing on Friday. It’s a battle that Mourdock calls gut-wrenching.

“We want to see maximum value for retired teachers, for retired state policemen and for the Indiana taxpayers. The way the federal government has orchestrated this bankruptcy it’s not happening and it's wrong and we're fighting to make sure it's made right," said Mourdock.

In the meantime, Chrysler faces a June 15 deadline to make a deal with Fiat. The Indiana funds invested in Chrysler at a rate of 43 cents on the dollar and Mourdock says they've been asked to settle for 29 cents. That amounts to a loss of $6 million.