The Bankruptcy Court's decision on Monday to approve the sale of Chrysler's assets has been halted by a U.S. federal appeal court which has agreed to hear an appeal by a group of Indiana state funds that have been battling against the New York court's decision as they believe the sale is illegal. Indiana's Treasurer has argued vociferously that the sale violates the constitution primarily as it was illegal to use TARP (Troubled Asset Relief Programme) funds', which were voted through by Congress to bail out ailing financial institutions, to support Chrysler.

The Indiana Treasurer Richard Mourdock said today in a statement: "We are pleased the Court of Appeals has agreed to hear our arguments. As we have stated from the beginning, Indiana retirees and Indiana taxpayers have suffered losses because of unprecedented and illegal acts of the federal government." While the bulk of the secured lenders which held some US$6.9 billion of debt against Chrysler settled for a payout of US$2 billion, which equated to 29 cents in the dollar, some creditors held out which plugged Chrysler into the chapter 11 process a month ago. All the other objectors dropped away leaving the Italian funds battling the court alone. Mourdock also added today: "I can not express strongly enough how I hate doing what I am doing. But I took an oath, to follow the law, and it requires that I do this, so I will."

The New York Bankruptcy Court's presiding Judge Arthur Gonzales finally gave the go ahead for the sale of Chrysler's assets on Monday after hearing three long days of objections, saying that the Indiana funds can't dispute the use of TARP funds as they have received their fair share of the US$2 billion allocated to secured lenders and this figure was higher than they could expect to receive in the case of an asset sale. The funds in dispute hold just US$42.5 million, less than 1 percent of the total debt, and they comprise of the Indiana State Police Pension Fund, the Indiana Teacher's Retirement Fund, and the Major Moves Construction Fund. They bought the debt in Chrysler in July last year for 43 cents in the dollar.

Meanwhile on the back of the release of solid sales data for May, Chrysler LLC today has announced enhanced June incentives that will appeal to what consumers want as they shop for new Dodge, Chrysler and Jeep vehicles. "Beginning this month we are pleased to offer special finance options to our customers through our new preferred lender, GMAC Financial Services," said Steven Landry, Executive Vice President North American Sales and Marketing, Service and Parts – Chrysler LLC. "Our dealers are now activated for retail business through GMAC Financial Services, which gives consumers more financing options as they look to purchase from our exciting line up of Dodge, Chrysler and Jeep vehicles."

Beginning immediately Chrysler LLC is to offer zero percent financing for 60 months through GMAC Financial Services on select 2009 model vehicles, or up to US$4,000 Consumer Cash on 2009 model vehicles. In addition, current Chrysler LLC vehicle owners are eligible for US $1000 Owner Loyalty cash on most 2008 and 2009 Chrysler, Jeep and Dodge vehicles. These offers are in addition to the US$1000 Credit Union Bonus Cash on select products for qualified credit union members who finance their new vehicle purchase through a participating Credit Union under the Invest in America program. These incentives are valid through July 1, 2009.