Judge Gonzalez Now Guilty Of Intentional Fraud In Chrysler Case.

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The entire case against the rejected Chrysler dealers revolved on one simple answer given by Fiat Executive, Alfredo Altavilla, when he was cross-examined by Dealer Counsel during the hearing to decide the fate of Chrysler.  Every other witness testified that neither the US Government nor Fiat requested that Old Chrysler reject the 789 Dealer franchise contracts.

Without a request by the lender (the US Government) or the purchaser (Fiat), there was no sound business judgment in Old Chrysler killing off 789 franchises.  This is because when a contract is rejected in bankruptcy, Section 365(g) of the Bankruptcy Code kicks in and gives those rejected dealers an unsecured creditor claim against the estate.   In this case, it was undisputed that the claim would potentially reach one billion dollars.

Old Chrysler had a fiduciary duty to its other creditors not to burden the estate with this mammoth claim.   However, had a key party sought rejection of those franchise agreements as a condition precedent to the deal closing then the Court might have been justified to approve the rejections.  But no party ever testified that the dealer restructuring was a necessary condition precedent to the sale closing.

The New Chrysler management were free to trim the dealership network once they took over.  After they owned the company, they could deal with the dealers as they liked and as would have been governed by State franchise laws which protected the dealers.   And all of the evidence shows that Fiat was happy to take on the entire dealership network in the sale.   The decision to kill off 789 dealerships was entirely the brain collapse of Old Chrysler’s management.  Therefore, the issue to be decided by the Court was whether this decision was made in sound business judgment.

The entire dealer rejection issue then turned on whether the rejections were a condition precedent to the sale closing.  If it was not a material issue to Fiat, and if Fiat’s executive testified that they were happy to trim the dealership network after the sale closed, then Old Chrysler should not have been allowed to reject the dealer contracts.  The Bankruptcy Court – under Section 365(a) of the Bankruptcy Code – must approve the rejections for them to become effective.

Here is the exact testimony by Alfredo Altavilla of Fiat which the case turned on:

Q. If this transaction closes without an absolute requirement of a particular number of dealers that are being terminated, would Chrysler still go through with this deal — I mean, rather, would Fiat still go through with this deal?

A. The answer is that a restructure needs to occur. Whether it occurs before or after the closing of the deal is not a material difference.

(See May 27, 2009 Hearing Transcript at 352.)

It’s a very straightforward answer.   Altavilla clearly testified that whether the dealer restructuring took place after the sale closed made no material difference to Fiat.  Clearly, this man and his foreign company were not going to walk away from a deal where the American people paid the ENTIRE 20 plus billion dollar purchase costs just to hand it over to Fiat for free.  Zippo nada zilch was paid by Fiat who were therefore in no position to demand 40,000 American jobs be lost and 789 dealerships be gutted.  Fiat didn’t make that insane demand and the testimony above clearly shows this to be true.

But Judge Gonzalez decided he was going to usher in a new era of judicial ventriloquism by taking on a new role for his soiled robe.  Gonzalez understood that the testimony needed for him to approve the rejection of 789 dealers (and loss of some 40,000 jobs) was nowhere to be found in the record of the case.  So Judge Gonzalez – through the use of creative footnoting – made up his own testimony and stuffed it into the mouth of Altavilla alla Edger Bergen and his dummy Charlie McCarthy.  Seriously folks – the metaphor is so very appropriate.

Please compare and contrast Altavilla’s testimony with Judge Gonzalez at Footnote 21 of the Gonzalez Rejection Opinion:

ALTAVILLA’S TESTIMONY

Q. If this transaction closes without an absolute requirement of a particular number of dealers that are being terminated, would Chrysler still go through with this deal — I mean, rather, would Fiat still go through with this deal?

A. The answer is that a restructure needs to occur. Whether it occurs before or after the closing of the deal is not a material difference.

THE JUDGE GONZALEZ OPINION AT FOOTNOTE 21

21 …Altavilla also responded affirmatively to a question regarding whether a dealership network needed to be restructured for the Fiat Transaction to close, stating that a “restructuring needs to occur.”

Altavilla never responded to any such question in the affirmative. Never, damn it.   This is a fraud on the Court, on the nation and on truth.   Any grammar school child can easily grasp that the witness clearly indicated restructuring was not a material difference to Fiat.  And if it was not a material difference to Fiat, 789 dealers and 40,000 jobs could have been saved while your Government gifted this American auto institution to a foreign national conglomerate with your own taxes.  That’s it in a nutshell, people.

In our original Motion memorandum we gave Judge Gonzalez the benefit of the doubt and refrained from calling this fraud intentional – opting instead to allege only that the Court’s judicial ventriloquism exhibited a reckless disregard for the truth.   But on Friday Feb. 5, 2010 Judge Gonzalez denied our Motion by issuing a 25 page Opinion (docket no. 6341 – public docket appears down today) which condoned intentional fraud on the part of Chrysler’s attorneys – Jones Day – who repeated multiple falsehoods in their Response Brief which we thoroughly dismantled in our Reply.

Furthermore, in not correcting the error of Footnote 21, Judge Gonzalez is now also guilty of intentional fraud as well.  He’s chosen to defend Footnote 21 and in doing so he is simply lying to the American People which is obvious to any impartial observer of the facts.  Footnote 21 is simply a lie by a partial Judge.  It’s fraud plain and simple.

The Law Office of Pidgeon & Donofrio (site will soon be updated to include Leo Donofrio’s info) will be appealing to the Southern District of New York and we will be making multiple complaints to the New York Bar asking for sanctions against Jones Day and Judge Gonzalez.

Our lead client, James Anderer has been on Fox Business News about 40 times now and we are hoping to increase public awareness through the media of this fraud.  The Chrysler story is only now truly being understood for the fraud against the American way that it is.  Please stand with us as this battle is sure to intensify.   The disease we are fighting is at the core of the intended destruction of this nation’s natural sovereignty.

Understand that this battle is as important a fight as this nation will ever see.  It will define whether we are going to allow the judicial branch to openly lie to our faces.  If no court will overturn Gonzalez here, it’s the end of truth, justice and the American way forever.  This judicial fraud will become the template for a new tomorrow where your children will have no protection of law.

Leo Donofrio and Steve Pidgeon represent 76 former Chrysler dealers.


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