GM Dealers Seek Representation In Chapter 11 Proceedings
June 03 2009 - 8:06AM
Dow Jones News
General Motors Corp.'s (GMGMQ) dealers, arguing the auto maker
is unfairly forcing them out of business, plan to ask a judge to
appoint a committee to represent them in the auto maker's Chapter
11 proceedings.
Former U.S. Attorney G. Douglas Jones is asking the judge
overseeing GM's bankruptcy case, filed on Monday, to enlist a
committee to represent the interests of hundreds of auto dealers
the auto maker seeks to close, he said in a statement
Wednesday.
GM on Tuesday sent letters to the dealers that are marked to
close, offering them from $100,000 to $1 million to shut down
without a fight, according to a dealer who received the letter.
GM is allowing dealers to stay open until October 2010, but not
to order new vehicles, the letter said. They have until June 12 to
accept the offer.
The auto maker has said it plans to shutter 2,400 dealerships.
The company sent letters to 1,000 dealers last month informing them
they are on the closing list, and more were informed Tuesday.
Jones was retained by Alabama auto dealer Abercrombie Chevrolet,
Inc.
"It is important to note that these dealerships are wholly-owned
and separate operating entities apart from General Motors," Jones
said in the statement. "Many of these dealerships are operating
companies that have successfully been in existence and turning a
profit for years."
Chrysler LLC is using the bankruptcy process to shed about
one-quarter of its dealers.
-By Sharon Terlep, Dow Jones Newswires;
sharon.terlep@dowjones.com