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UPDATE 1-US judge denies Chrysler request in Plastech fight

(Adds Chrysler comment, background)

DETROIT, Feb 19 (Reuters) - A U.S. bankruptcy court judge denied Chrysler LLC’s request on Tuesday for permission to seize tools and move business away from bankrupt auto parts supplier Plastech Engineered Products Inc to other companies.

“I’ve determined to deny Chrysler’s motion,” Judge Phillip Shefferly said, adding that details of the ruling were contained in a written opinion also released on Tuesday.

A Chrysler spokesman had no immediate comment on whether the automaker would appeal the ruling.

“We’re obviously disappointed with the decision,” Chrysler spokesman Kevin Frazier said. “We do plan to continue to work with all parties to ensure the delivery of parts to our plants.”

The dispute idled five Chrysler plants in early February and is being closely watched by Plastech's other major customers, including Johnson Controls Inc JCI.N, Ford Motor Co F.N and General Motors Corp GM.N.

Dearborn, Michigan-based Plastech and its other creditors had opposed the request to seize tools from Plastech that Chrylser says it had paid for, saying the move would cause the supplier to collapse at the expense of banks and other companies with financial claims on its restructuring.

Privately held Plastech, which makes parts for vehicle interiors, filed for bankruptcy this month with $488 million in debt after Chrysler served notice it intended to take its business to a competing supplier.

The Feb. 1 bankruptcy filing in Detroit made Plastech one of several prominent suppliers forced into bankruptcy by rising material costs, declining vehicle production volumes and pressure for price cuts from the troubled Detroit-based automakers.

A Chrysler supplier for the past 10 years, Plastech supplies about 360 different parts that are used in nearly every vehicle the struggling No. 3 U.S. automaker makes, including the Jeep Wrangler and the Dodge Ram pickup truck.

Now majority owned by Cerberus Capital Management LP CBS.UL, Chrysler was widely seen as a tougher line than automakers have taken with troubled suppliers in the recent past by seeking a court order allowing it to take its tools and business to other firms. (Reporting by Kevin Krolicki and David Bailey; editing by Jeffrey Benkoe)

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