In re Old Carco LLC
Chrysler Group LLC (New Chrysler) moved to enforce a prior Sale Order, arguing it precluded Michigan, Illinois, and Indiana from using Old Carco LLC's unemployment insurance experience rating to determine New Chrysler's tax rate. The United States Bankruptcy Court for the Southern District of New York, presided over by Judge Stuart M. Bernstein, denied the motion without prejudice. The Court found it lacked subject matter jurisdiction under the Tax Injunction Act, 28 U.S.C. § 1341, because the states provided a plain, speedy, and efficient remedy for New Chrysler to challenge the tax assessments in state courts. The decision highlighted the jurisdictional barrier of the Tax Injunction Act, which prevents federal courts from interfering with state tax collection, even in bankruptcy proceedings related to interpreting a sale order.