DENVER — Colorado Attorney General John Suthers announced today he has joined more than two-dozen other attorneys general from across the country in objecting to General Motors’ bid to unfairly modify its auto dealership agreements as part of its bankruptcy case in a New York federal court.
“GM should not force its dealerships here in Colorado to unfairly bear the burden for its past mismanagement,” Suthers said. “Accordingly, I have joined with other attorneys general as well as the Colorado Motor Vehicle Dealer Board to object to General Motors’ attempts through the bankruptcy proceedings to improperly overhaul the agreements it has with its dealerships.”
According to the joint objection as well as an objection Colorado filed separately, GM is effectively forcing dealerships to substantially modify their agreements with the company or risk being closed. Under Colorado law, it is unlawful for an automotive manufacturer to coerce a dealership to accept an onerous dealership agreement through the threat of canceling or not renewing an existing dealership agreement.
Colorado also has concerns that the sale order GM is seeking in its bankruptcy case could undercut Colorado’s regulation of manufacturer-dealership relationships. Special concessions, which would apply to a reorganized GM after the bankruptcy sale is completed could upset the even playing field all automotive manufacturers and dealers enjoy in Colorado.
“The latitude the motion would give General Motors to modify its dealership agreements potentially affects thousands of jobs throughout Colorado,” Suthers said. “It is crucial that GM not be allowed to unfairly force dealerships to swallow burdensome agreements.”