May 29, 2009

LANSING - Attorney General Mike Cox and Jack A. Nolish, Director, Michigan Workers' Compensation Agency, today announced a settlement with the new, yet-to-be-named entity commonly referred to as "New Chrysler" that protects injured workers.  The settlement will protect the benefits due to Chrysler's injured workers and help ensure the continued viability of the State of Michigan's Workers' Compensation Funds. 

"Today's settlement will secure the Workers' Compensation Funds which assist all workers across Michigan," said Cox.  "Chrysler and 'New Chrysler' are to be commended for their willingness to resolve this issue, protect workers who are injured, and help ensure the financial viability of the fund."

The settlement was reached today, following lengthy negotiations with Chrysler and "New Chrysler" attorneys.  The agreement will become effective when the Bankruptcy Court approves the sale of Chrysler's assets to "New Chrysler."  Today's agreement narrowly averts a court fight over the workers' compensation obligations.

"We appreciate the cooperation of the parties in getting to an agreement that will protect injured workers and our security fund," said Nolish.

On May 6, the Attorney General's office filed an objection in Chrysler's bankruptcy proceeding, stating that as a result of the bankruptcy, Chrysler should not be allowed to abandon their obligation to the Workers' Compensation Funds.  Chrysler pays an estimated $25 million annually in workers' compensation benefits to its injured workers.  The effect of "New Chrysler" assuming these obligations is estimated to be worth nearly $174 million.

-30-