Ohio Joins in Objecting to Chrysler Sale for Workers’ Comp Reasons

The state of Ohio has joined Michigan in its objection to the pending sale of Chrysler LLC because of workers’ compensation issues.

Ohio Attorney General Richard Cordray said his office filed a limited objection to the pending Chrysler sale in United States Bankruptcy Court, Southern District of New York.

The objection was filed on behalf of the Ohio Bureau of Workers’ Compensation (BWC) in an attempt to protect Ohio’s workers’ compensation system in the pending asset sale.

Michigan Attorney General Cox filed papers in bankruptcy court in early May, objecting to the sale of Chrysler assets to Italian automaker Fiat and claiming the new company won’t meet obligations to a state workers’ compensation fund.

A federal bankruptcy judge has approved Chrysler’s plan to review and accept bids for sale.

In the event of a sale as currently proposed, the Ohio Bureau of Workers’ Compensation could ultimately have to assume payment and administration of Chrysler’s self-insured workers’ compensation claims, the Ohio AG’s office said. As a result, the state’s self-insured guaranty fund could be negatively impacted, creating unforeseen effects on all self-insured companies, many of which are struggling.

“The objection filing is an attempt to protect injured workers and self-insured employers in Ohio by preserving the integrity of Ohio’s self-insured guaranty fund,” said Cordray. “The pending sale could create undue stress on our workers’ compensation system. We will fight every step of the way to ensure Ohio’s self-insured employers and their workforce are protected.”

Through its “First Day Order” request, granted by the U.S. Bankruptcy Court of Southern New York, Chrysler has committed to fulfill its workers’ compensation obligations to its current Ohio workforce. The order does not hold a new owner to the same conditions.

“BWC is closely monitoring the situation with Chrysler and is prepared to effectively manage any transition of claims management,” BWC Administrator Marsha Ryan said. “As always, our first concern is to ensure the continued support, care and medical treatment of their injured workers.”

The Attorney General’s objection requests that the Court enter an order denying the sale motion until the workers’ compensation obligations are properly addressed. If the sale motion is approved as presented, the purchasing company could apply for self-insured status in Ohio.

Source: Ohio Attorney General’s Office