A Texas Chrysler dealership has filed a motion in the Chrysler LLC bankruptcy case that could test the relevance of state franchise laws that protect dealers.
The dealer, a casualty this year of a Chrysler Financial floorplan cutoff, is in U.S. Bankruptcy Court in New York trying to get paid $15 million, which he says hes owed for vehicle inventory.
The dealer terminated his Chrysler franchise agreement in February and closed Lawrence Marshall Chrysler-Dodge-Jeep in Hempstead, Texas, said William Green III, the dealerships attorney.
The dealer is protected under Texas franchise laws for payment of inventory and parts, Green said. This claim appears to represent the first test of how much weight the Bankruptcy Court will give to state franchise laws.
Green said the dealer wants the money to pay off outstanding floorplan loans. It would go a long way toward reducing the floorplan money still owed, he said.
Floorplan loans are used by dealers to buy vehicle inventory.
The dealerships claim in Bankruptcy Court is unsecured. On April 29, Chrysler LLC filed for Chapter 11 bankruptcy.