Tipton County files $14.1 million claim against Getrag over failed project

Tipton County officials have filed a $14.1 million claim against Getrag Transmission LLC in the U.S. Bankruptcy Court of Southern Michigan.

The claim was filed Monday, the last day to file against Getrag Transmission LLC, which filed for Chapter 11 bankruptcy protection in November.

Michael McCrory, the attorney representing Tipton County, said the claim covers all costs incurred by the county in regard to the construction of the planned transmission plant at the intersection of U.S. 31 and Ind. 28.

Getrag Transmission and Chrysler entered into an agreement in 2007 to construct a $530 million plant that would have employed 1,200 people in Tipton County. Last October, Chrysler filed a lawsuit against Getrag Transmission LLC over the inability to secure financing to complete the plant.

Getrag Transmission filed for bankruptcy protection and canceled the Tipton County project.

McCrory said the $14.1 million claim includes $5.5 million in bonds purchased by both Getrag and Chrysler, $3.1 million in bonds sold by the county to Harris Bank and other expenses.

"We want to preserve the county's rights when the distribution of the assets takes place," he said.

McCrory said discussions are on-going with Getrag.

He said the claim was filed on deadline day in the hopes something might have happened to make filing of the claim unnecessary.

"Our position is the bonds would never have been issued had the county been advised, as was required, that there was no agreement to go forward with the project," McCrory said.

The $11 million in bonds were sold to Chrysler and Getrag on Sept. 16, and the next day it was revealed the necessary financing to complete the plant was not obtained.

Last week, Congressman Dan Burton sent a letter to Chrysler asking the company to honor its commitment to Tipton County to pay the costs to the county if the project wasn't completed.

Burton wants Chrysler to return the $5.5 million in bonds to Tipton County, pay Tipton County $4.2 million for bonds sold to a bank for infrastructure improvements and $300,000 the county paid for road and drainage work.