One shoe has fallen and the other is hanging in the air. What to do? Dan Myers and Loula Fuller, attorneys who practice dealership law, have some advice for Chrysler and General Motors dealers: You must prepare now to protect yourself and your business.
CHRYSLER DEALER ALERT
One shoe has fallen and the other is hanging in the air. What to do?
If you are a Chrysler dealer, you need to fill out and file a proof of claim with the Bankruptcy Court in the Southern District of New York. In an abundance of caution, you need to get a financial evaluation of your dealership's net worth.
You also need to add up all the money spent over the past five years on relocations, renovations and new facilities.
You need to put together a collection of all the correspondence by and between you, the dealer, and Chrysler, the manufacturer. Focus closely on forecasts made by Chrysler or requirements forced upon you by Chrysler.
No matter how long Chrysler remains in bankruptcy, when the dust settles, the company will try to eliminate a significant number of dealers. But try as they may, they are not going to be able to do it by just saying, "You're gone."
In many instances, dealers were required to build, renovate, relocate or remove non-Chrysler brands. Each of those actions was required by Chrysler and cost you, the dealer, money.
In most instances, you did what was required, relying on representations made to you by Chrysler employees and coming directly from Auburn Hills via electronic communications. Those communications may have, in some instances, contained forecasts of future sales that were false or inaccurate, market plans that were known to be unachievable and projections of Chrysler strength that were false and misleading.
Any of these actions by Chrysler make it difficult or impossible to eliminate you as a dealer, regardless of the bankruptcy issue.
The main thing to remember is that you are not alone or unarmed. You need to take as much control of your future as you can by putting everything in order in case you need to defend your dealership investment.