After the collapse of the Getrag – Chrysler LLC deal, the state of Indiana puts the car manufacturer under the microscope for possible securities fraud. According to an insider, the investigation has started but there are no allegations or complaints made.
If the joint venture between the two companies pushed through, a $530-milliion transmission assembly plant would have risen in the Tipton County and jobs for 1200 people would have been created. All of these plans were dissolved after Getrag declared a bankruptcy protection under Chapter 11.
Getrag was pushed to against the wall when Chrysler LLC filed a complaint against Getrag claiming that the latter failed to get the appropriate financing.
The spotlight is on the revenue bonds sold by the Tipton County to Getrag and Chrysler. A local paper revealed that the bonds sold to the two companies amount to around $11 million.
Chrysler offered the Tipton County $5.5 million in bonds so it can cushion the impact of the dissolved deal on the community. The car manufacturer blames Getrag’s failure to set up the required financing for the deal.
Around $14.5 million worth of funds have been released by Chrysler LLC before to improve the required production framework at the Tipton County plant.
Getrag representatives declined to comment about the issue citing that they are not the ones under investigation.
Last February, the secretary of commerce of Indiana pushed for Chrysler to pay some 40 contractors using about $4 billion government bail out funds. The car manufacturer insisted that the contractors were hired by Getrag. Getrag, on the other hand, argued that Chrysler was the one to quit from the project.