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Published: Thursday, 10/11/2007

Dana dispute with U.S. may stall other creditors

Dana Corp. s dispute with the U.S. government over an estimated $300 million in environmental liabilities, its largest unsecured claim, may delay creditor recoveries from the bankrupt company.

U.S. District Judge Shira Scheindlin denied a motion by the government to stop Dana from litigating the U.S. claim for damages. The judge did give the government 60 days to assess environmental damages. The U.S. had appealed to Judge Scheindlin after a bankruptcy judge denied its effort to stop the challenge.

The discovery period is extended by 60 days, thereby extending the date of the final estimation hearing, which had been scheduled for Jan. 14, Judge Scheindlin said in an Oct. 4 order.

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