Consumer Law

Chrysler Bankruptcy Trumps Lemon Law Claims

By Kemnitzer, Anderson, Barron, Ogilvie & Brewer

Chrysler's bankruptcy has left owners of Chrysler lemon vehicles without a remedy. Under bankruptcy law, Chrysler owners with lemon law claims are are merely unsecured creditors who are essentially last in line. Owners may file a claim with the bankruptcy court, but it is unlikely such claims will be paid.

The owners in the worst shape are those who turned in their vehicles pursuant to a settlement only to have Chrysler's checks bounce after the company filed its Chapter 11 proceeding on April 30, 2009. When a company files bankruptcy, all its bank accounts are frozen. It is unclear how this will get sorted out.

In a May 9 story in the Los Angeles Times, Chrysler spokesman said the company "has no plans" to ask the bankruptcy judge to approve lemon law claims.

Full post as published by Lemon Law Blog on May 10, 2009 (boomark / email).