GM terminated auto dealers seek official committee representation

By Caroline Salls

Pittsburgh, June 3 - General Motors Corp.'s soon-to-be-terminated auto dealerships have asked U.S. Trustee Diana G. Adams to appoint a special committee to protect their interests in the company's bankruptcy case, according to a news release.

The request was delivered in a letter sent by former U.S. Attorney G. Douglas Jones to Adams.

According to the release, the dealerships operate as separate operating entities and have provided hundreds of millions in tax revenues to state and local governments.

"The best way to at least create a seat at the table for the affected dealers and the claims they represent in the bankruptcy is the appointment of a terminated dealers committee," Jones said in his letter to Adams.

"The significant interest these dealers have in the orderly bankruptcy process and the interplay of the dealers' rights under both bankruptcy law and applicable state laws is vital.

"The appointment of such a committee is crucial in these opening days as important decisions concerning the future of General Motors are being reached."

As previously reported, GM announced in May that it intended to cut auto dealerships by 42%, based on 2008 to 2010 levels. Specifically, the release said dealerships will be reduced by 2,641 locations, to 3,605 from 6,246.

"Unlike many of the major affected players, including the United States government, United Auto Workers, major suppliers, bondholders and multi-million dollar pension funds, these small town dealerships risk having no voice in the General Motors bankruptcy," Jones said in his letter.

According to the release, Jones, who served as U.S. Attorney for the Northern District of Alabama from 1997 through 2001, is now a partner with the Haskell Slaughter Young & Rediker, LLC law firm, which filed suit on behalf of Abercrombie Chevrolet against GM and GMAC in February for "arbitrarily and capriciously altering dealership financing terms and requirements in an effort to drive dealers out of business."

GM, a Detroit-based automaker, filed for bankruptcy on June 1 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 09-50026.

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