DETROIT -- The state of Indiana has filed a complaint against Chrysler LLC alleging civil securities fraud in connection with the collapse last year of the carmakers $530 million dual clutch transmission joint venture with transmission maker Getrag Transmission LLC.
The complaint concerns $11 million in revenue bonds issued in 2008 by Tipton County to pay for infrastructure improvements around the planned factory, which was to have made fuel-saving dual clutch transmissions for Chrysler vehicles. The plant was to have employed about 1,200 workers.
The document alleges that Chrysler and Getrag, a German supplier, failed to notify the county they had been unable to agree on financing arrangements for the plant before the county sold the bonds. On Sept. 16, 2008, $11 million in bonds were issued. The next day, Chrysler advised Getrag it could not make the guarantees Getrag had requested in order to get funding for the plant.
On Oct. 7, 2008, Chrysler filed suit in Michigan accusing Getrag of a breach of contract. Getrag filed for bankruptcy Nov. 17, 2008. On Oct. 30, Getrag filed a motion to dismiss Chryslers suit and filed its own countersuit.
On Feb. 20, 2009, Chrysler wrote the Tipton County Board of Commissioners refusing the countrys request that Chrysler reimburse the county and return the bonds.
Construction of the Chrysler-Getrag plant is currently 80 percent complete.
Chrysler, in a statement, said it paid for about $14.5 million in infrastructure improvements around the project and received $5.5 million in bonds issued by the county. Chrysler offered to transfer $5.5 million in bonds back to the county at no cost as part of Chrysler's good faith efforts to minimize the impact on Tipton County of the commercial dispute with Getrag triggered by Getrag's failure to arrange required financing for the project, the statement said.
This will help Tipton County find other uses for the property in a way that benefits the community.