Car Leasing News

Judge Phillip Shefferly of the U.S. Bankruptcy Court ruled on the impasse between Chrysler and Plastech Engineered Products Inc., in favour of Plastech. According to the ruling, Plastech can continue to keep the tooling it used to make supplies for Chrysler mainly because they had applied for Chapter 11 Bankruptcy only three weeks ago. This ruling allows Plastech a chance to reorganize and possibly emerge from the financial crisis it is in.

Chrysler, that had applied to pull out tooling from Plastech factories, would have had to shut down its factories and re allocate tooling to other suppliers had the court ruled against Plastech. The judge, Shefferly stated,” The Court concludes that Chrysler’s legitimate and substantial interests … are, at this moment in time, outweighed by the harm that would be suffered”

However, Plastech was also warned not to misuse this opportunity it has been granted and also commented about the imminent difficulties Plastech could have in building strong business ties with its customers if it litigated them.

Though this ruling was an obvious disappointment to Chrysler, most insiders agree that the judge mastered this tightrope between the supplier and the customer. The judge not only acknowledged Chrysler’s rights to pull out tooling, but also gave Plastech a chance to redeem itself, and also made sure that Plastech understood that though the ruling was in their favour, it could change soon if they did not pull their act together.

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