DETROIT – A settlement between the state of Michigan and New Chrysler to protect benefits paid to the company’s injured workers was announced on Friday. The state had challenged the bankruptcy and sale of Chrysler to Fiat Sp.A. (which remains pending in federal bankruptcy court in New York City) because of the potential effect it could have on the state’s worker’s compensation funds.
In a statement, Attorney General Mike Cox said the settlement reached between the automaker and the Worker’s Compensation Agency will “secure” the funds, helping all workers across the state.
The settlement takes effects when the assets of the current Chrysler Corporation are transferred to the “New Chrysler” entity when that is approved by the courts.
The value of the obligations the new company would hold will total some $174 million.
The agreement also avoids what could have been a significant court fight over the obligations. The state had filed its objection to the bankruptcy on May 6.
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