Dealers' Armageddon: Block the Sale
To that end, the Committee, which represents 300 dealers from 45 states, filed papers in bankruptcy court yesterday, demanding the court to delay the hearings meant to approve Chrysler's sale.
"Chrysler's proposed asset sale and request for immediate termination of the 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," Stephen Lerner, an attorney at Squire Sanders & Dempsey representing the committee was quoted as saying by the source.
The dealers' attempts to block the sale raise the number of parties who oppose this move to three, but their chances of succeeding are small. The previous two attempts, coming from senior lender and retirees, have both been disbanded, as the lenders dropped their case and the retirees got benefit extension.
Chrysler, on the other hand, claims that dealers "compete not only with dealers selling Fords and Toyotas, but also with each other in surrounding markets." The dealers held their ground and replied that "there is no evidence that by rejecting dealership agreements New Chrysler will save money to any material degree."
A second group of dealers, representing those who have stronger sales that the first group, are expected to follow the Committee and file another blocking attempt.