Chrysler's unsecured creditors are suing Daimler AG, alleging that the former parent company “stripped billions of dollars in assets" before selling what was left of it to Cerberus Capital Management in 2007.

According to Reuters and Automotive News, those creditors filed suit in U.S. Bankruptcy Court on Monday, alleging that Daimler’s actions left them “…unable to look to these assets to satisfy their claims."

The creditors further allege that Daimler knew as far back as 2006 that its 1998 acquisition of Chrysler (in the so-called-at-the-time “merger of equals”) was a failure, and that Daimler engineered "fraudulent transfers" of Chrysler assets to cut its losses.

(That’s after running off top ChryCo management, design, engineering and production people, making poor product decisions--especially the botched midsize (Sebring/Avenger) cars, and an over-reliance on trucks and SUVs—draining Ma Mopar’s coffers of about $6 billion in cash that it had on hand at the time of the “merger,” and basically running the company that my Dad once worked at into the ground—Scott)

Both Reuters and Automotive News quote court documents filed last week, in which Daimler said it had "nurtured" Chrysler from the time of Daimler’s May, 1998  acquisiton of it, and for the next nine years until Daimler sold control of Chrysler to Cerberus “…at a steep loss.”

Chrysler filed for Chapter 11 reorganization in April, and on June 10 it emerged from bankruptcy as part of an affiliation with Fiat.

When Chrysler’s unsecured creditors won permission from the Bankruptcy Court last week to file the suit, a Daimler spokesman said a suit would be without merit.

(Did that spokesman also say that such a suit would also cause airsickness in turkeys?—Scott)

(Courtesy Reuters/Automotive News)