The Globe and Mail reports that Toronto-based Trillium Motor World has filed a $750m class action suit on behalf of 215 culled Canadian GM dealers. The suit names General Motors and, in an interesting twist, its law firm Cassels Brock & Blackwell LLP. According to a suit’s statement of claim, Cassels Brock was representing Canada’s federal government in bailout talks with GM at the same time as it was representing the Canadian Automobile Dealers Association, a relationship it never disclosed to the dealers. Conflict of interest much?
According to the G&M:
GM Canada sent e-mail notices to the dealers on May 20 and gave them until May 26 to respond to a compensation offer. The suit says GM warned dealers that “there was a ‘strong possibility’ that GM would file for reorganization under the Companies’ Creditors Arrangement Act.”
GM Canada did not file for protection under the CCAA, but the suit says the company did not offer any dealers who signed the wind-down agreement the option of changing their minds.
The suit accuses the auto maker of adopting “a ‘shock and awe’ strategy giving the affected dealers no more than a few days to come to grips with what they were facing, organize themselves and obtain effective legal representation on the WDA.”
This combined with allegations against Cassels Brock combine for a potent combination. More from Reuters.