Judge won't dismiss Chrysler dealer termination suit stemming from '09 bankruptcy

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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