General Motors dealers will get access to state courts for a host of potential disputes with the new car company under an agreement approved by the bankruptcy court.
GM had sought to limit dealers access to state protections by forcing post-bankruptcy disputes to be resolved in bankruptcy court, Colorado Attorney General John Suthers said in an interview today.
The auto makers agreement with 45 states was included in the bankruptcy judges order Sunday approving the sale of more profitable GM assets to a new government-controlled company.
Among the disputes that can be addressed in state courts include those involving product-liability claims, warranties, and compliance with lemon laws, privacy and no call laws, and environmental and tax laws, Suthers said.
This provides bread-and-butter protection against arbitrary or coercive corporate action, Tim Jackson, president of the Colorado Automobile Dealers Association, said today.
The agreement does not cover termination disputes between GM and dealers, said Suthers, who helped negotiate the agreement. Those disputes will continue to be handled in bankruptcy court.
We didnt get everything we wanted, he said in an interview. But the new GM will be fully subject to state regulation.
GM has announced plans to eventually pare its dealer network from 6,000 stores to about 3,600.
GM spokesman Tom Wilkinson declined comment.
The judges order, which is not yet final, cited GMs agreement with the states. It said disputes between GM and its dealers will be resolved locally.
Nebraska Attorney General Jon Bruning, who led the state negotiators, said GMs concessions wont interfere with the ability of new GM to function as a viable company nor should they add to the burden placed on taxpayers.