Chrysler is asking a bankruptcy court to bar its former dealers from suing the automaker for rejecting their contracts.
Several dealerships, including a group of eight Wisconsin stores and separate dealers in Ohio and Arkansas, took legal action against Chrys ler in and outside of bankruptcy court, alleging that the automaker’s rejection of their contracts violated state franchise laws.
Chrysler said the legal action should be blocked and that the dealerships should be held in contempt because the lawsuits are a violation of court orders rejecting the contracts and approving the sale of Chrysler assets to an entity run by Fiat SpA, according to papers filed Tuesday with the U.S. Bankruptcy Court in Manhattan.
“This court should enforce its own orders and bring the litigation filed by the noncompliant dealers to an end before that litigation undermines the terms of the sale to New Chrysler,” Chrysler said.
Chrysler is also asking for reimbursement of legal fees associated with fighting the lawsuits.
A hearing on the conflict between the automaker and the dealers is scheduled for today.
The dealerships say that while “Old Chrysler” rejected their contracts, state laws require “New Chrysler” to allow the dealerships to sell Chrysler, Jeep and Dodge products as long as those vehicles continue to be sold in their states.
Courts should “enforce New Chrysler’s obligations under Wisconsin (law) to allow the Wisconsin affected dealers to act as authorized dealers of New Chrysler and to sell and repair New Chrysler’s products,” attorneys for the Wisconsin dealers said in court papers.
If the government-backed sale was not free of encumbrances, Fiat would have walked away and Chrysler would have liquidated, the automaker said.
