Lemon Law Litigants Prevail Despite Chrysler's Bankruptcy

Mar 2
05:30

2024

Aiken & Scoptur, S.C.

Aiken & Scoptur, S.C.

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Despite Chrysler's 2009 bankruptcy, individuals with Lemon Law claims retained their right to seek justice. The Law Offices of Vince P. Megna in Milwaukee, Wisconsin, offers expert legal representation to those challenging formidable corporate entities. Vince Megna, a renowned Lemon Law specialist, personally oversees each case. For a complimentary case evaluation, reach out at 414-326-4979, 866-415-5919, or through their online contact form.

The Impact of Chrysler's Bankruptcy on Lemon Law Claims

On April 30,Lemon Law Litigants Prevail Despite Chrysler's Bankruptcy Articles 2009, Chrysler LLC, once a titan of the automotive industry, filed for Chapter 11 bankruptcy protection. With assets totaling $39.3 billion, Chrysler's bankruptcy ranks as the seventh-largest in U.S. history. At the time of the filing, approximately 1,350 consumer lawsuits were active against Chrysler, alleging violations of Federal and State Lemon Laws. The bankruptcy filing and the consequent automatic stay under the Bankruptcy Code abruptly halted these claims, preventing consumers from taking any further legal action against Chrysler.

Understanding Lemon Laws

Lemon Laws are designed to protect consumers who find themselves with defective vehicles. These laws mandate that manufacturers or their authorized dealers must rectify vehicle defects within a reasonable timeframe. Should the repairs not be completed satisfactorily, Lemon Laws compel the manufacturer to either replace the vehicle, refund the purchase price, or compensate the consumer. Additionally, most Lemon Laws stipulate that the manufacturer is responsible for covering the consumer's legal fees.

The Birth of a "New Chrysler"

As part of Chrysler's restructuring plan, the company proposed selling the majority of its assets to Italian automaker Fiat. This move aimed to create a revitalized and more efficient Chrysler entity in partnership with Fiat. After legal challenges and court hearings, the Bankruptcy Court approved the Fiat transaction on June 1, 2009, effectively giving rise to a "New Chrysler."

Resumption of Lemon Law Claims

Court documents dated June 30, 2009, revealed that the "New Chrysler" agreed to assume certain liabilities from the bankrupt Chrysler, including ongoing and future Lemon Law claims. This agreement enabled the 1,350 consumers, whose lawsuits were previously stalled by the bankruptcy, to proceed with their litigation in courts across the United States.

The "New Chrysler" will take on the liability of the bankrupt Chrysler and replace it as the defendant in existing Lemon Law litigation. Future claims will be directed against the "New Chrysler," with consumers retaining the same rights and remedies as before the Chapter 11 filing. The Bankruptcy Court was anticipated to sanction the "New Chrysler" assumption of Lemon Law liabilities by July 16, 2009.

The Legal Landscape Post-Bankruptcy

The continuation of Lemon Law claims post-bankruptcy is a significant aspect of consumer rights protection that is often overlooked. According to the Center for Auto Safety, Lemon Law claims provide a vital mechanism for holding manufacturers accountable and ensuring vehicle reliability. The ability of consumers to pursue these claims even after a major bankruptcy highlights the resilience of consumer protection laws.

For those facing similar legal battles, it is crucial to seek specialized legal counsel. The Law Offices of Vince P. Megna stand ready to assist, backed by Vince Megna's expertise and commitment to consumer rights. Contact them for a free consultation and ensure your rights are upheld in the face of corporate restructuring.

Contact the Law Offices of Vince P. Megna for more information or to schedule a consultation. For further details on Lemon Laws and consumer rights, visit the Center for Auto Safety.