Former dealers seeking as much as $750 million in compensation from GM Canada related to 2009 downsizing
TORONTO—General Motors of Canada Ltd. (GM Canada) is heading to court to defend itself against a class action suit launched by 182 former dealers.
The dealers contend they should get more compensation for agreeing to shut down in 2009 when the automaker slashed its operations to qualify for billions of dollars of government bailout money.
The former dealers are seeking as much as $750 million in compensation, but the amount would be reduced by money they previously received from GM Canada.
GM Canada says former dealers covered by the class action received a total of $123 million for agreeing to shut down by the end of 2009 and that there was no room for negotiation.
But the dealers argue they weren’t given enough time under provincial law to make the decision and that they didn’t receive proper legal advice from a Toronto firm, which has been named as a defendant in the class action against GM Canada.
The civil trial in Toronto begins Sept. 9 is scheduled to last about six weeks.