Wednesday, June 10, 2009

Bankruptcy Court Allows Chrysler to Terminate 789 Franchises

This posting was written by John W. Arden.

A bankruptcy court ruled yesterday that auto maker Chrysler LLC could immediately terminate 789 Chrysler, Dodge, and Jeep franchises in accordance with its plan to cut costs and quickly emerge from bankruptcy, according to an Associated Press report.

In an oral ruling late Tuesday afternoon, Judge Arthur J. Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York allowed Chrysler to terminate approximately one-quarter of its dealership base.

More than 25 attorneys, representing hundreds of franchisees across the country, had argued that termination of the franchises was unnecessary and would not result in substantial savings.

A written decision on the ruling is forthcoming

Further information regarding the Chapter 11 bankruptcy case—In re Chrysler LLC, Case No. 09 B 50002 (AJG)—appears on the court website.

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