A Federal judge will allow some 75 Chrysler dealers to proceed with a lawsuit against the U.S. Treasury Department, according to Automotive News. The dealers insist that the government violated the Fifth Amendment in administrating the Chrysler bankruptcy when it terminated their dealership franchises.

The lawsuit asks for some $200 million in damages, according to the report, but does not name the bankrupt automaker. Chrysler shed 789 dealers as part of its 2009 bankruptcy, a process that has led to no shortage of lawsuits and angry former stakeholders.

Whether the ranks of jilted dealers participating in the suit will swell remains to be seen. AN quotes the dealers' attorney, Leonard Bellavia of Mineola, N.Y., as saying, "We received a very important decision today. After this decision, I expect those dealers sitting on the sidelines to join the case."

The lawsuit, filed last February, will now move to discovery, according to Bellavia, who told AN he plans to depose Treasury officials who worked on the auto task force headed by "Car Czar" Stephen L. Rattner.


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  • 34 Comments
      SloopJohnB
      • 2 Years Ago
      Three words..."I don't recall." will solve most of the problems in discovery.
      Joe
      • 2 Years Ago
      NICE WORK OBAMMA ADMINISTRATION!!!! Thanks for coming to our "rescue"....OH WAIT you just screwed things up even more, streched the constitution in an effort to make yourself look like a HERO...when you're nothing more than a ZERO!!! I HOPE THE GOVERNMENT CAN CONTINUE TO ILLEGALLY FIND ITS WAY INTO OUR PRIVATE LIVES!!! OBAMA 2012!!!
        dsb1252
        • 2 Years Ago
        @Joe
        Get a life.
        ZPLAYR
        • 2 Years Ago
        @Joe
        oh they will find a way they have slowly been twisting the consitition for years and getting away with it by putting in supreme court justices that are in favor of thier agendas. S C justices should be voted in to office by the people
          Danaon
          • 2 Years Ago
          @ZPLAYR
          Because that works so well for Congress and the presidency, right?
      richman99
      • 2 Years Ago
      Oh goodie..... more taxpayer money will be spent to not only fight this law suit, but also to ultimately settle this case out of court!! Thanks again Obama for throwing our money away without giving us any input whatsoever!! Just another example of taxation without representation!!
      cpenrod
      • 2 Years Ago
      Finally, a federal judge with a sense of justice? Commie-in-Chief Obama and his commie cohorts (Geithner, et al.) screwed the dealers, screwed the American people, and screwed American freedom to payback their commie union comrades. Obama should be impeached, tried for treason and hanged.
      RobbieAG
      • 2 Years Ago
      Plenty of people got screwed by this deal, dealers, bond holders, rule of law etc. The only ones that made out were Owebama's union cronies. They have every right to sue but it's going to be hard to go against the Feds.
        billfrombuckhead
        • 2 Years Ago
        @RobbieAG
        American consumers made out, 1/3 of the cars sold last year were from GM and Chrysler. Imagine the prices JapanInc would have charged without the competition. The dealers still in business are doing better than ever. The communities depending on these factories and stronger dealers also did well. bondholders=credit default swap thieves
          juststeve35
          • 2 Years Ago
          @billfrombuckhead
          Perhaps... but two facts are so obviously absent from your comment: 1. What was the COST to the American people, and therefore the consumer, to keep these two behemoths afloat vs. the value of saving a few bucks on a car and having a few small select communities have only 8.7% unemployment instead of the 10+ rampant across the nation. 2. Japan, Inc would have been kept neatly in line by the monster Ford would have become, PLUS the aggressive actions of the Korean (Kia/Hyundai) automaker who is following Honda's business model in the US (from inception to today) to a T!
        Joe
        • 2 Years Ago
        @RobbieAG
        GO OBAMMA 2012 I WANT 4 MORE YEARS OF A GOVERNMENT WHO HANDS ARE IN EVERYONES POCKETS...A government more worried about making themselves look like heros than the good of the country!!!!
        rlog100
        • 2 Years Ago
        @RobbieAG
        Many dealers are as responsible for Chrysler's low profit margins as anyone else. Or are all car dealerships, good dealership? Because state governments generally have retroactively changed dealership franchise laws to the point where companies like Chrysler had no recourse against crappy dealers. The foreign automakers have been around long enough that in several states, its starting to happen to them too.
          juststeve35
          • 2 Years Ago
          @rlog100
          Chrysler's production/inventory practices lead to the low margins.... They signed ridiculous contracts with the striking Unions that lead to the manufacturer being responsible to pay them even when laid off! This lead to the factories producing vehicles that no dealer had requested because if you gotta pay them to NOT build, might as well build. This led to Detroit area airports that had NO long-term parking available because the Factory lots were FULL of vehicle so Chrysler rented the airport lots to store more unsold cars... This led to Chrysler paying dealerships to take the vehicles! I worked for a Top 20 Nationally dealership in '07-'10 and they once paid us $1.5M in 'Marketing' money to take possession of around 500 vehicles... This led to something called VPA... Basically a high-volume objective with huge cash payouts which effectively rewarded dealers to LOSE MONEY on auto sales (selling below Invoice minus holdback) to reach objectives and get paid... This is what eroded the margin, the resale value and perceived value of Chrysler's brands... Don't blame the dealers!
        msdpok1961
        • 2 Years Ago
        @RobbieAG
        It's always the union's fault....
          juststeve35
          • 2 Years Ago
          @msdpok1961
          FACT: A significant factor to the bankruptcy of these two automakers is the Union contracts in place at that time.... Forget the benefits and pensions, these 'great Union folks' went on strike and then held the manufacturers hostage and received a contract that paid the workers ALMOST THE SAME AMOUNT EVEN WHEN LAID OFF! C'mon, seriously? This encouraged them to build vehicles they did not need and had no 'homes' for as it was almost cheaper to build them than layoff the workers! While I appreciate Unions looking out for the little guy, by what logic or right do they hold a company hostage to pay their staff even when there is no work? It's criminal....
      hockeyn109
      • 2 Years Ago
      The dealers were shafted and so were the share holders. No one seems to want to acknowledge this. The UAW made out like bandits on the taxpayers money which Obama forked over so eagerly, for the votes folks!
      pjcmp
      • 2 Years Ago
      So, why did you folks vote for Obama in the first place???? You knew he was about as dumb as a box of rocks...we tried to tell you but somehoe this guy figured out how to make the whites feel guilty and vote him in! So, like what you got? We told you so!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
      barackisfinished
      • 2 Years Ago
      Former GM dealers should do the same.
        Danaon
        • 2 Years Ago
        @barackisfinished
        GM didn't terminate dealers the same way Chrysler did. They either bought dealerships out of their contracts or just didn't renew their contracts when the current ones ended. However, these Chrysler dealerships have a decent case against the Treasury. GM's bailout had a lot of shady things going on but it paled in comparison to the railroad job that was Chrysler's bankruptcy.
      wrascil
      • 2 Years Ago
      No problem the TAX-PAYERS will take it up the butt, Once more for the community organizer... With this new suit the tax-payers will have been on the hook 5 times for Chrysler, As Chrysler employee's HOPE the tax-payers will bail them out once more... Americans don't want to put up the CHANGE to pay for it. Where are those worthless leaches called the 99% on this one
      bfgm123
      • 2 Years Ago
      chrysler dealer burnt my ass several years ago , sorry, no sympathy here.
        juststeve35
        • 2 Years Ago
        @bfgm123
        So refreshing to read the comment of someone who is clearly empathetic for their fellow Americans who had their livelihood demolished at the hands of this administration.... Your mommy must be so proud to have raised such a caring, giving, selfless person... . o 0 (jackwagon)
      billfrombuckhead
      • 2 Years Ago
      NO ONE HAS MORE ENTITLEMENT ISSUES THAN FRANCHISED DEALERS AND THEIR OFFSPRING.
        juststeve35
        • 2 Years Ago
        @billfrombuckhead
        Hmmm... Sounds like a jilted, bitter ex-dealership employee!
      SAUNDERS
      • 2 Years Ago
      As I recall, and I may not be perfectly correct, Many Lenders took the hit also. Again as I recll, the Bankrupcy Filing just wiped away loans that were perfectly filed in the correct place, Meaning they had the lien on the equipment and inventory (whatever the UCC filing reflected), then Obama's take over just made those creditors lose their liens, therefore losing the right to recoup from the disposal of of the collateral. Any other bankruptcy filing would give the lenders the right to repossess the collateral AND/OR payments under the plan sufficient to cover the value of that collateral. The shareholders also lost out, but that was okay, Obama saved the industry. If you wonder why, think of all the votes he will get at next election. He is already courting the;Auto industry employees. Lenders don't have the numbers to offer any challenge in the voting booths.
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