Performance Transportation ordered to give vehicles back to GM

By Caroline Salls

Pittsburgh, July 3 - Performance Transportation Services, Inc. has been ordered to grant General Motors Corp. access to its premises to allow GM to take back vehicles allegedly being held "hostage" by Performance, according to a Thursday filing with the U.S. Bankruptcy Court for the Western District of New York.

As previously reported, GM has filed a lawsuit against Performance seeking the return of 281 new GM vehicles.

According to the complaint, Performance has no claim to the $8.5 million worth of vehicles, which are allegedly GM property.

GM said the vehicles in question were delivered to Performance before the latter ceased operations for the purpose of transporting them to customers under a 2007 contract for motor transportation.

Now that Performance has ceased operations, GM said it is entitled to immediate return of the vehicles, but Performance has refused to return them.

GM said there is a risk that the vehicles could depreciate in value or be damaged if they are not transported to waiting customers.

Judge Michael J. Kaplan specified in Thursday's ruling that, if Performance does not sign an acknowledgment of any damage to the vehicles, GM will be required to prove any damage before it can collect on damage claims.

In addition, GM must pay $9 million it owes under a related agreement by Wednesday, subject to setoff for any damage claims.

Performance Transportation Services, a Detroit-based transporter of new automobiles, sport utility vehicles and light trucks, filed for bankruptcy on Nov. 19, 2007. Its Chapter 11 case number is 07-04746.

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