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Old 01-27-2010, 08:04 AM   #1
AVANTI R5
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Default Canadian Dealers Sue GM

http://www.autonews.com/


Ousted Canadian GM dealers are suing the company for $750 million


Quote:
A class action lawsuit seeking $750 million in damages has been filed on behalf of 215 Canadian auto dealers terminated by GM as it reorganized last year under the threat of bankruptcy.

The suit was filed in the Ontario Superior Court of Justice and claims that GM of Canada Limited breached franchise laws as it selected dealers for elimination.

The suit also takes aim at a Canadian law firm, CBB, which had been retained in advance to represent Canadian dealers in a GM restructuring or bankruptcy. The suit claims the law firm failed to disclose to the dealers that it was simultaneously acting on behalf of the Canadian Government in the GM auto bailout. CBB is denying the allegations.


The lawsuit noted that the Canadian Government insisted that GM scale back its dealership network as a condition of its multi-billion dollar bailout funding. The bailout was the largest government subsidy given to a corporation in Canadian history.

The suit charges that after GM presented a termination package to the affected dealers, CBB told them to consult their individual lawyers in the limited time which they had to respond to the package. Unable to negotiate as a group, and without group legal counsel, the vast majority of dealers signed the termination package as presented by GM rather than risking GM filing for a formal insolvency proceeding as the automaker threatened to do if the dealers rejected its offer. The dealers had between two and four business days to accept the package which was offered.

David Sterns, one of the lawyers for the lead plaintiff, stated “These dealers include some of the best in the country. The offer they were handed gave them a fraction of what their businesses were worth, but they had no collective representation and precious little time.”

The claim states that the dealers “were the only significant stakeholders in the GM auto bailout which were denied a voice in the restructuring.” Regardless, it is claimed that many of the dealers have a right under provincial franchise laws to cancel the agreements.

GM avoided a formal insolvency proceeding in Canada, unlike in the United States where its parent company reduced its dealership network through a formal Chapter 11 filing.
The representative plaintiff, Trillium Motor World Ltd., brought the action under Ontario’s Class Proceedings Act, 1992. The claim seeks court certification to represent all 215 similarly affected dealers in Canada. The members of the class include automotive dealerships in every province of Canada
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Old 01-27-2010, 09:19 AM   #2
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F-um. A company in the US is failing and they want to sue them. Boo Freaking hoo if you decided to sell cars that the public did not want. If the company decides to stop supporting your dealership, you are just out of luck. Pick a better brand. This reeks of desperation.
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Old 01-27-2010, 11:21 AM   #3
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Yeah, I agree. I feel for the laid off folks, but I don't see any real basis for the lawsuit. They went with GM, GM tanked, they're screwed.
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Old 01-27-2010, 11:28 AM   #4
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GM Canada didn't fail....reading FTW.

They aren't suing a "US company" either...they are suing a Canadian one that (allegedly) broke the franchise laws here.
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Old 01-27-2010, 04:43 PM   #5
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Originally Posted by DCCDPro View Post
GM Canada didn't fail....reading FTW.

They aren't suing a "US company" either...they are suing a Canadian one that (allegedly) broke the franchise laws here.
Really??? GM is the parent company, which by the way was kept alive, not with Canadian dollars, but American. Unless they were shutting down plants, I don't see what the problem is with some dealerships. And Canadian plants consist of what claim to fame----Equinox? Torrent? Windsor engines? I mean really. Those plants were dead in the water for some time now; if they weren't, GM Canada would have taken the Canadian cash that was offered. I say good ridden dealerships, and be glad there is still a company called GM Canada.
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Old 01-27-2010, 04:51 PM   #6
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GM Canada received approximately $10.5billion dollars from the Canadian Government. Yes, I'm not pleased about that either...there are only 30million Canadians here so roughly $3000 per person for every man woman and child.

In relation to the few thousand jobs and government insured pensions it saved we would have been better off to buyout every GM Canada employee....but that's another story.

What would you do if you just spent a few million renovating your Pontiac dealership to meet GM's specs only to have it shut down a few months later?
What they did simply contravened the franchise laws here (allegedly), you beak the law you pay the penalty...I don't like GM personally I would never buy anything purely "GM" made. From my point of view there are a disproportionate number of Nascar hat wearing aggressive drivers that seem to love the entire Pontiac lineup so I'm glad to see the division closing but that's my personal perspective. If I set those feelings aside though it still comes down to the fact that the law is the law and they harmed these dealerships by not treating them within the specific laws we have here so they will likely have to pay a penalty.

Last edited by DCCDPro; 01-27-2010 at 05:02 PM.
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Old 01-28-2010, 09:40 AM   #7
hondahata
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Originally Posted by DCCDPro View Post
GM Canada received approximately $10.5billion dollars from the Canadian Government. Yes, I'm not pleased about that either...there are only 30million Canadians here so roughly $3000 per person for every man woman and child.

In relation to the few thousand jobs and government insured pensions it saved we would have been better off to buyout every GM Canada employee....but that's another story.

What would you do if you just spent a few million renovating your Pontiac dealership to meet GM's specs only to have it shut down a few months later?
What they did simply contravened the franchise laws here (allegedly), you beak the law you pay the penalty...I don't like GM personally I would never buy anything purely "GM" made. From my point of view there are a disproportionate number of Nascar hat wearing aggressive drivers that seem to love the entire Pontiac lineup so I'm glad to see the division closing but that's my personal perspective. If I set those feelings aside though it still comes down to the fact that the law is the law and they harmed these dealerships by not treating them within the specific laws we have here so they will likely have to pay a penalty.
I absolutely see your point; just to think that every employee could have been bought out....WOW. It's been so long since I followed the story, that the last I remembered GM Canada had turned down the 3-5bil that was offered (now to learn that they really were just holding out for more). But a few million renovating a PONTIAC dealership based on what? Holden sales figures? No doubt the dealerships are getting the shaft, but bad business practices are bad business practices---and no citizen or their dollars should have to to pay for that.
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Old 01-28-2010, 08:31 PM   #8
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No kidding! If you were a Pontiac dealer 2 doors down from a GM dealer would you think it was going to last forever? I can never understand peoples business decisions either, to us it's obvious....what delusion were they living under?

Though I guess hindsight is always 20/20, back in 2007 who would have thought this would have happened?
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