Former Chrysler dealers sue U.S. over store closures

DETROIT: Sixty-four former Chrysler dealers sued the U.S. government on Thursday, saying the Obama administration violated their rights by closing their stores during the automaker’s bankruptcy without compensation.The dealers said they were due “at least $130 million” in damages from the shutdown of their stores, according to a complaint filed with the U.S. Court of Federal Claims in Washington.In court papers, dealers said the termination of those stores helped stabilize the U.S. economy and prevented the disruption of the American auto industry.”This is a loss that should not, however, be borne by a few individual auto dealers but … must in fairness and justice be borne by the public as a whole,” dealers said in court papers.Chrysler filed for bankruptcy in April 2009. It sent termination notices to 25 percent of its dealers — or 789 stores — as part of its U.S. government-funded restructuring in May 2009.The Treasury Department declined to comment. In May 2009, Treasury said the store closures were “necessary” to help Chrysler rebound from its near-collapse and said it played no role in deciding which and how many dealers would close.In court papers filed Thursday, the dealers said the U.S. government leveraged its authority under the Troubled Asset Relief Program to skirt state franchise laws designed to protect dealers.Dealers said they spent millions on training, inventory and marketing to help sell Chrysler vehicles. For example, a group of four dealers in Maryland spent nearly $9 million to revamp their facilities and make other changes.The dealers came from 29 states across the country including California, New York and Texas, according to the complaintm – Yahoonews