In re Chrysler LLC (2009)
Citation: 576 F.3d 108 · Court: U.S. Court of Appeals for the Second Circuit · Judgment: affirmed June 5, 2009 (opinion filed later; CAP lists the decision date as 2009-06-05 and CourtListener lists 2009-08-05) · Opinion: Jacobs, Chief Judge.
Source note (2026-10-18):
- Links on this page to
https://static.case.law/f3d/576/cases/0108-01.json,https://static.case.law/f3d/592/cases/0370-01.jsonare an (unofficial Caselaw Access Project copy, retrieved before 2026-10-18; host disallows automated access); no official or otherwise permitted full-text copy was located on 2026-10-18.
Case page. Legal information, not legal advice. Last verified: 2026-10-16.
Facts
Indiana pension funds holding Chrysler secured debt, tort claimants and others appealed a Southern District of New York bankruptcy order approving the § 363(b) sale of Chrysler’s auto-manufacturing assets, “together with the associated intellectual property and (selected) dealership contractual rights,” to a new entity (“New Chrysler”). The sale order extinguished existing and future claims against New Chrysler that arose before closing or related to vehicles produced before closing. (Source: https://static.case.law/f3d/576/cases/0108-01.json , retrieved 2026-10-16.)
Holding
- The sale was not an impermissible “sub rosa plan”: “Lionel’s multi-factor analysis remains the proper, most comprehensive framework for judging the validity of § 363(b) transactions,” and a court “may approve or disapprove a § 363(b) transfer that is a sale of all or substantially all of a debtor’s assets, using the analysis set forth in Lionel in order to determine whether there was a good business reason for the sale.”
- On successor claims: “We agree with TWA and Leckie that the term ‘any interest in property’ encompasses those claims that ‘arise from the property being sold.‘” “The possibility of transferring assets free and clear of existing tort liability was a critical inducement to the Sale.”
- On future claims, the court declined “to delineate the scope of the bankruptcy court’s authority to extinguish future claims, until such time as we are presented with an actual claim for an injury that is caused by Old Chrysler, that occurs after the Sale, and that is cognizable under state successor liability law.”
Subsequent history
The Supreme Court granted certiorari, vacated the judgment, and remanded “with instructions to dismiss the appeal as moot. See United States v. Munsingwear, Inc., 340 U.S. 36 (1950)” (Order List, Dec. 14, 2009, No. 09-285, https://www.supremecourt.gov/orders/courtorders/121409zor.pdf , retrieved 2026-10-16). On remand the Second Circuit vacated its judgment and dismissed the appeal as moot, 592 F.3d 370 (2d Cir. 2010) (per curiam) (https://static.case.law/f3d/592/cases/0370-01.json , retrieved 2026-10-16).
Practical impact
The opinion remains widely cited for the Lionel framework and for following in-re-trans-world-airlines-2003, but because the judgment was vacated it is not binding precedent. The Second Circuit’s later decision in elliott-v-general-motors-2016 addresses the due-process limits on enforcing free-and-clear sale orders.
Good-law status
Vacated as moot. Persuasive authority only.
Applies in →
businesses-and-going-concerns, bankruptcy-363-sales
Legal information, not legal advice. Verify against the current primary source before relying on this summary.