Class action trial against General Motors of Canada and Cassels Brock & Blackwell over 2009 mass dealership terminations to begin September 9, 2014

TORONTO, Sept. 5, 2014 /CNW/ - Trial will begin on September 9, 2014 in a class action lawsuit on behalf of 182 former Canadian GM auto dealers terminated at the time of GM Canada's 2009 government-funded auto bailout.

The suit names General Motors of Canada Limited (GMCL), a subsidiary of General Motors Company (NYSE: GM) and Cassels Brock & Blackwell LLP (Cassels), a major Canadian law firm.

The lawsuit, seeking $750 million in damages, alleges:

GMCL breached provincial franchise laws through a high-pressure, fast-paced campaign to eliminate the dealerships at minimal cost under the threat of a GMCL bankruptcy filing in Canada in May 2009.

Cassels was retained by the Canadian GM dealers to act for them in an expected restructuring but was in a conflict of interest because it also acted for the Government of Canada on the GM auto bailout. 

GMCL gave insufficient time and misleading information to the dealers when it presented the termination package. GMCL threatened to seek formal insolvency protection if any of the dealers rejected the offer.

With only six days to respond to the offer, dealers turned to Cassels.  But Cassels, without having disclosed its conflict of interest to the dealers, took a passive role and left the dealers with no viable alternatives. Without effective representation and with no remaining time to organize a collective response, the vast majority of dealers signed back the termination offer as presented by GMCL and wound down their businesses.

GMCL did not file for bankruptcy protection, unlike its parent company which made a formal Chapter 11 filing in the United States.

In a 68-page decision certifying the case as a class action in 2011, the Honourable Justice G.R. Strathy (now Chief Justice of Ontario) described the tumultuous events that took place over six days in May 2009 while GMCL sought to eliminate the dealers. 

The class includes dealers in every Canadian province.  Former owner/operators of dealerships in Toronto, Ottawa and Kingston will testify on behalf of the plaintiff class.

The trial in Trillium Motor World Ltd. v. General Motors of Canada Limited and Cassels Brock & Blackwell LLP begins September 9, 2014 at 10 AM at 330 University Ave. Toronto, Courtroom 5-1.

The certification decision is available at:  http://www.sotosllp.com/wp-content/uploads/2011/03/reasons-for-decision-certification.pdf.

The court filed statement of claim is available at:  http://www.sotosllp.com/wp-content/uploads/2014/07/Amended-Amended-Statement-of-Claim-amended-June-17-14.pdf

Pour une copie de la déclaration en français cliquez:  http://www.sotosllp.com/wp-content/uploads/2014/07/D%C3%A9claration-modifi%C3%A9e-modifi%C3%A9e.pdf

The dealers are jointly represented by the Toronto law firms WeirFoulds LLP (www.weirfoulds.com) and Sotos LLP (www.sotosllp.com).

SOURCE: Sotos LLP