A judge declined on Wednesday to postpone Chrysler's bankruptcy to allow a district court to hear arguments about whether the U.S. government exceeded its authority in the reorganization of the automaker.

An attorney for three state retirement funds from Indiana requested the bankruptcy hearings be postponed until a district court could determine if the U.S. government acted legally in the Chrysler bankruptcy.

The U.S. government provided the automaker emergency loans prior to its bankruptcy, has committed to providing nearly $5 billion to finance the bankruptcy and is participating in a group that plans to buy most of the assets of the company.

(Reporting by Tom Hals; editing by Carol Bishopric)

Chrysler