The newly organized “Committee of Chrysler Affected Dealers” has filed an objection to Chrysler’s proposed asset sale to Fiat that is key to Chrysler emerging from bankruptcy. Lawyers for the group are asking the U.S. Bankruptcy Court in Manhattan to delay hearings that would approve the asset sale and rejection of the dealer franchise agreements. The hearings are now set for May 27 and are key to Chrysler’s early exit from bankruptcy.
Jim Press, Chrysler president and vice chairman, said last week that he was confident Chrysler’s decision to terminate dealers will withstand legal challenges.
The dealer’s lawyers, however, insist the termination is improper.
“Chrysler’s proposed asset sale and request for immediate termination of dealer franchises will destroy several hundred independent businesses, ruin the livelihoods of their owners, cause the loss of thousands of jobs and precipitate inevitable personal and business bankruptcies flowing from the closing of the affected dealers,” said Stephen D. Lerner, head of the bankruptcy and restructuring practice at Squire, Sanders & Dempsey. Lerner leads the team representing the dealer committee, which represents the collective interests of nearly 300 dealers in 45 states. (more…)