During Chrysler’s bankruptcy in 2009, some dealers were forced to shut down. Now they want to be back in business, but Fiat-Chrysler claims the stores would be too much competition, and the Supreme Court has refused to hear the case between the embattled dealers in Ohio and Michigan and their corporate overlords.
The Detroit News reports that a federal appeals court has ruled in favor of four former Chrysler dealers by saying that current state franchise laws can’t prevent the reopening of dealerships that were closed during the 2009 bankruptcy. FCA attempted to appeal the decision to the Supreme Court, but the case will not be heard.
Due to the bankruptcy and restructuring agreement in 2009, Fiat Chrysler had to shut down 789 of its nearly 3,200 dealers. These stores had only 22 days notice before closing their showrooms. In December of 2009, Congress passed a bill that allowed dealers to arbitrate their closings. During the process, some former dealers were granted a letter of intent that didn’t guarantee a reopening, but set up a framework for a possible agreement to resume sales.
After the bankruptcy FCA offered new franchises, then tried to make the case that the state franchise laws would prevent the closed dealers from reopening. The dealerships say they can comply with FCA’s franchise requirements that include having at least a two-acre site with 16,000-square-feet of structures that meet the company’s requirements, a working capital of between $986,500 -$1.38 million and therefore should have an opportunity to re-open their stores.
Now that that courts have sided with the dealers, they are one step closer to regaining their stores and hope that the next step is a sales agreement with Fiat Chrysler to start selling cars once again.
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