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Chrysler Order

michael webster's picture
Posted Wed, 2009/06/10 - 12:15 by michael webster

SCOTUS order for ChryslerClick the image to read the Supreme Court order in the Chrysler Bankruptcy. Now here is the order that the Dealers wanted (pdf). The discrepancy of the two orders between the court and the dealers' attorneys show what this fight was about.

It was about inventory. The terminated dealers were in essence trying to become secured creditors with respect to the buy back of their inventory.

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Chrysler Bankruptcy Order.pdf248.93 KB
Proposed Chrysler Order.pdf46.68 KB
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Court Rules Chrysler Can Terminate Franchise Agreements at Will by Guest
Submitted by Guest on Thu, 2009/06/11 - 10:34.
When a franchisor goes into bankruptcy, how common is it for the bankruptcy court to void franchise agreements at the franchisor's behest? A New York bankruptcy court overruled the objections of 789 dealers on Tuesday and said Chrysler could terminate them all.
June 9, 2009 - The judge in the Chrysler bankruptcy case late this afternoon granted Chrysler’s wish to fire 789 dealers. Judge Arthur Gonzalez of the Federal Bankruptcy Court for the Southern District of New York overruled the objections of the terminated dealers. Gonzalez also rejected the notion that he should wait to see if the Supreme Court will even consider dealer and bondholder objections to the sale of Chrysler to Fiat. The order is effective immediately, and barring an appeal, the “rejected” dealers have no claims against the New Chrysler Group when it emerges from bankruptcy. - The Detroit Bureau
Franchisees are begging Chrysler to keep them.
When franchisor goes into bankruptcy, it has the same rights to by RichardSolomon
RichardSolomon's picture
Submitted by RichardSolomon on Thu, 2009/06/11 - 12:08.

avoid contract obligations that anyone else would have. Being a franchisor does not have different rules.

What worrysome is that attorneys representing auto dealers would file lawsuits without knowing that/knowing that and not telling their clients/knowing that and filing bozo lawsuits because they have a client who is angry and willing to pay fees, case or no case. But it would not be the first time and it comes as no surprise.

People file bozo lawsuits all the time.

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Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School


Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
The Point of Bankruptcy by michael webster
michael webster's picture
Submitted by michael webster on Thu, 2009/06/11 - 12:05.

Guest writes: "When a franchisor goes into bankruptcy, how common is it for the bankruptcy court to void franchise agreements at the franchisor's behest?"

Uh, that is the point of  going into bankruptcy: to get rid of contracts and leases that are no longer valuable. 

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"


Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"


Obama to compensate zees? by Paul Steinberg
Paul Steinberg's picture
Submitted by Paul Steinberg on Wed, 2009/06/10 - 12:50.

Fox News this morning reports that the administration is discussing a plan to compensate the auto dealers who are being terminated.

Unclear whether this is a trial balloon or if it has any traction.

Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400


Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
GM payouts average $900,000 by Les Stewart
Les Stewart's picture
Submitted by Les Stewart on Wed, 2009/06/10 - 15:29.
So says Canada's largest daily newspaper, today's Toronto Star.
General Motors of Canada dealers losing their franchises under the automaker's survival plan will receive an average $900,000 each under terms of a confidential offer, but they say it won't cover steep closing costs in many cases... A senior executive at a Toronto-area dealer that received a termination notice said GM's criteria for keeping some dealers open and closing others doesn't seem to make any business sense. "How GM can choose to terminate some of their most successful retailers – when every sale counts – over some of their lesser performing dealers is beyond me."
Being outbid is a bitch. Les Stewart MBA FranchiseFool :: WikidFranchise.org

Les Stewart MBA FranchiseFool :: WikidFranchise

That I find hard to believe. by RichardSolomon
RichardSolomon's picture
Submitted by RichardSolomon on Wed, 2009/06/10 - 13:53.

Most auto dealers are extremely wealthy - more by far than most people can even imagine - even the small town dealers.

Almost all auto dealers are Republicans.

The good ones will be picked up by other auto manufacturers.

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Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School


Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Yugo looking for American Dealers by Bob Frankman
Bob Frankman's picture
Submitted by Bob Frankman on Wed, 2009/06/10 - 14:21.

"The good ones will be picked up by other auto manufacturers." - Solomon

The times, they are a changin'. Auto dealers are trying to dump their franchisees, even many of their good ones. Japanese and South Korean makers want to keep dealers thin.

But I hear Yugo is looking for American car dealers. If the dealer pays them a franchise fee of $100k, they can be a dealer. Fuller Dymaxion is looking for a comeback too.Their franchise fee is cheaper.  India's Tata says that its also looking for dealers to peddle the world's cheapest car.