By on January 21, 2010

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.

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4 Comments on “200 Canadian GM Dealers File $750m Class-Action Suit Over Dealer Cull...”

  • avatar

    Umm, yeah. All dealers should have had their ear to the ground as GM’s bankruptcy loomed. It was in the news every day. The subsequent cullings should have been no surprise.

    Only 6 days to make up their mind? Not much, but that’s more than most employees get. GM’s liquidation would have given them nothing.

    I thought signed agreements were usually binding.

    The alleged conflict of interest is a problem.

    I say settle it for the $750 million, and everybody walks away. While I’m no GM lover, I’m tired of hearing dealers whining; they were part of the problem GM is trying to fix.

  • avatar
    Gardiner Westbound

    It’s probably easier to nail Jello to a wall than win a suit against a law firm. Cassels Brock will plead it erected a Chinese wall between the people representing the various interests that separated and isolated them preventing conflicts. Try proving different! That part of the case won’t go anywhere.

    The other is more interesting. GM Canada never declared bankruptcy, so it lacks protection. On the other hand, it doesn’t have any money. It’s running on the taxpayers’ dime.

    • 0 avatar

      But naming the law firm as a party for conflict of interest has already damaged it badly with all its clients and would-be clients. Those entities it represents now will be reviewing that relationship soon and new clients won’t be knocking the doors down. That is a cardinal sin in the legal world and will hurt them badly.

  • avatar

    What better bedfellows than GM, GM dealers, and lawyers… all of whom specialize in short-term gain and political manipulation at the expense of everything else? Throw in the CAW and you’ve got a match made in Heaven.

    I hope they all take each other out in spectacular fashion, while I continue enjoying my North American-built Hyundai/Toyota/Honda/Nissan. Free markets aren’t all bad.

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