PRESENTER: LEN BELLAVIA, ESQ. – PARTNER, BELLAVIA GENTILE & ASSOCIATES
DATE: FRIDAY, JUNE 22, 2012
TIME: 9:00 AM – 12:00 NOON
LOCATION: ROCKY HILL MARRIOTT
DOWNLOAD REGISTRATION PDF

In May of 2009 the Franchise Protection Act became law – this act greatly enhances the protections the franchise law affords Connecticut’s dealers. Our law ensures that dealers are properly and fairly compensated by the manufactures for warranty labor and parts work.

This is not a one-off benefit – dealers are allowed apply more than once but no more than twice in any calendar year. Many dealers applied for retail reimbursement when the law was originally enacted but many others did not; and even for those who did we feel that the potential for a significant revenue increase is well worth taking an initial–or another – look at.

To that end we have asked Attorney Len Bellavia of Bellavia Gentile & Associates to come speak to our members on this subject.

The law firm of Bellavia Gentile & Associates is widely regarded as a pioneer in the area of warranty reimbursement at retail and is a nationally known dealer advocacy law firm. Leonard A. Bellavia, Esq. is a recognized authority in this area and has represented hundreds of dealers in obtaining retail reimbursement.

This workshop is designed for BOTH categories of dealers: those who have and have not obtained retail reimbursement under the Connecticut statute.

Attorney Bellavia will explain common mistakes dealers make in applying for retail that cost them hundreds of thousands of dollars in lost revenue.

This workshop will take you through the process step by step while allowing you ample time to ask questions and get all the answers you need to take advantage of our improved franchise laws.

Who Should attend? Principal, General Manager, Service Manager or Parts Manager.

Seating Is Limited For This Workshop So Register Today!

U.S. government bailouts of General Motors and Chrysler became a constitutional battleground when they were pushed through bankruptcy court in 2009.

Turns out the battle isn’t over just yet.

More than 220 former car dealers are pressing their case that the Obama administration violated the U.S. Constitution when the car makers terminated franchise agreements while in bankruptcy restructuring.

More than 220 car dealers are alleging the Obama administration violated the Constitution when their franchises were terminated during the government-brokered bankruptcies of General Motors and Chrysler. Among those dealers is Herb Adcox of Chattanooga, Tenn., shown here.

They are seeking compensatory damages ranging from $500,000 to more than $5 million apiece.
Two claims, initially filed in October 2010 and February 2011, cleared the government’s motions to dismiss in February and are now heading into the pre-trial discovery phase. The dealers’ lawyers are seeking government documents that they hope will show that auto makers had to eliminate some dealerships as a condition of receiving funds from the government’s Troubled Asset Relief Program.

The cases are believed to be the first to test the constitutionality of the federal government’s $80 billion bailout of the auto industry under the Bush and Obama administrations.

Supporters say the actions saved hundreds of thousands of jobs, while critics say they artificially propped up two failing companies, however large.

Herb Adcox of Chattanooga, Tenn., says he just wants a fair price for his car lot, which he valued at some $3 million in June 2009, including property and an inventory of 150 vehicles and parts worth $250,000 when GM terminated its relationship with him. Without new GM vehicles to sell, Mr. Adcox turned to selling used cars and repairs. His sales dropped to 25 vehicles a month from more than 100 a month earlier in the year.

“I lost money in 2009,” he said, declining to provide specific dollar losses.

Mr. Adcox is party to one of two lawsuits now winding their way through the U.S. Court of Federal Claims in Washington, D.C. His case is seeking class-action status, and the plaintiff lawyers behind that case say they hope to include the claims of all Chrysler or GM dealerships that were hurt by the rejections.

The plaintiffs say that the Obama administration violated what’s known as the “takings” clause of the Fifth Amendment.

Originally written to protect citizens from uncompensated government seizure, the takings clause has long been invoked to resist government seizure of private property for large infrastructure projects.

The dealers’ claims may be a long shot because government lawyers are expected to argue that the U.S. didn’t take anyone’s property, and it was GM and Chrysler that legally terminated business relationships with these dealers.

The judge warned in February that “the theory under which plaintiffs hope to recover does not fit neatly” into a normal takings-clause case. The government has until Friday to respond to the complaints.

Some of the dealers also were involved in earlier challenges to the car maker’s bankruptcy proceedings. Government lawyers might argue that the lawsuits are essentially a second bite at the apple for those dealers.

The plaintiffs are arguing that the U.S. government’s involvement, loaning taxpayer money and overseeing GM and Chrysler’s restructuring, perverted the natural course of bankruptcy. U.S. Treasury was not just a lender, but a government actor, they say. Leonard Bellavia, a partner at Bellavia Gentile & Associates LLP in Mineola, N.Y., who is representing 125 former Chrysler dealers, aims to show that terminating the dealership contracts was “a condition of receiving funds” from Treasury.

“When the government decides to intervene in the economy and targets industries for whatever reasons, under the Fifth Amendment it must pay compensation for what it takes or destroys,” says Richard Faulkner, partner at Blume, Faulkner, Skeen & Northam, PLLC, Richardson, Texas, who is representing a group of former dealers.

Franchises, such as the Chrysler and GM dealerships, generally don’t face termination by a franchiser because they are protected by state laws. But those state laws were trumped by federal laws when the auto manufacturers filed for bankruptcy. Federal bankruptcy law gives companies wide latitude to reject undesirable contracts. Some dealers attempted to fight their rejections during the bankruptcies but they didn’t prevail.

Carl Tobias, who teaches constitutional law at the University of Richmond, said he sees the case as a difficult one. He said he doesn’t expect the government to settle because “the stakes are too high.” Apart from the cost to even partially reimburse hundreds of closed dealerships, Mr. Tobias says the government “wouldn’t want to have a precedent that this type of action is unconstitutional.”

GM spokesman Greg Martin said of 6,375 GM dealers in the U.S. at the end of 2008, only 57{f15fad3b04d89020a05738ee85256797e9759bd19fdd229b29bad9398df16913} were profitable. The company has since reduced that number to 4,407, of which 90{f15fad3b04d89020a05738ee85256797e9759bd19fdd229b29bad9398df16913} are profitable, a level the company hasn’t seen in its dealers since the 1970s, he said. “We’re not looking back,” he added.

“Chrysler Group’s optimized dealer network is contributing to improved vehicle sales and customer service and will continue to be a vital part of the company’s success,” said Michael Palese, a Chrysler spokesman. “Plans to place all of our brands under one roof, in well-located facilities, also have resulted in enhanced dealer profitability, and greater investment by existing dealerships.”
Many who lost their franchises were able to sell for other new-car manufacturers, sell used cars, open muffler shops or rental car agencies. Some say they have been struggling since 2009, even if they were able to keep their doors open by selling used cars.

They claim they fell into debt when they lost profit from the vehicles and parts they had on their lots. Many depended on those profits to cover overhead expenses like their dealership mortgages and payroll.

Jim Koehler, owner of Scotia Motors in Scotia, N.Y., and a plaintiff in the Chrysler suit, said he lost about $2 million when his Dodge franchise, started by his father in 1946, was revoked. Mr. Koehler, 67, now runs a used-car sales and service shop with his wife and daughter, but he says the business is not profitable. “I hope we are all made whole,” he says. “This has been the three worst years of my life.”

Rob Engel, 59, and his brother, Richard owned a Chrysler-Jeep dealership in Tenafly, N.J., and a Chrysler dealership in Wyckoff, N.J. They lost their franchises in 2009. The Wyckoff location also had a wholesale parts warehouse.
He entered into arbitration with Chrysler in 2010. Neither dealership was reinstated even though both were profitable, Mr. Engel says, adding that he never found out why his locations were selected.

Mr. Engel estimates he had more than $1.5 million in parts between the warehouse and the two retail locations. “We cashed out our life insurance policies to sustain mortgage payments on both buildings,” he says.

Today, Mr. Engel has a Kia Motors dealership in Tenafly and is renting the Wyckoff property to an auto body shop.

Dave Smith, 58, president of Colonial Chevrolet Company Inc., in Woodsville, Miss., says that in May 2009, GM offered $7,950 to close operations within 18 months. He refused to sign the agreement and his dealership contract was terminated.
“We’re losing money now,” he says.

New car sales used to account for 65{f15fad3b04d89020a05738ee85256797e9759bd19fdd229b29bad9398df16913} of annual profits, with the rest coming from parts and repairs. The business today is focused on repairs and a few used car sales, he says.

It is billed as a one-of-a-kind legal issue, but as with many court proceedings it is becoming one thing after another.

The issue centers on suits filed by Chrysler and General Motors dealers who lost their franchises in 2009.

They contend their constitutional rights were violated when the auto makers dropped retailers as part of a government bailout and post-bankruptcy plan.

The lawsuits contend the federal government violated the Fifth Amendment, which says private property shall not be taken for public use without just compensation.

“This case is unique, one of a kind,” says Richard Faulkner of a Texas law firm representing 96 dealers. “Nothing quite like this litigation has been pursued, because the U.S. government has never stolen people’s property like this before.”

In a dealer-packed courtroom, Judge Robert H. Hodges Jr. recently denied government motions to dismiss dealer cases in the U.S. Court of Federal Claims in Washington.

“Dealers are ecstatic,” Faulkner says of the ruling.

The court on April 12 further denied the government’s motion to reconsider the case. This means the government must answer the class action suits, dealer lawyers say.

Meanwhile in Detroit, U.S. District Judge Sean Cox ruled Chrysler dealers who lost their franchises but got them back after winning arbitration cases don’t have the right to reopen at their original locations. He also said dealers were not entitled to financial compensation for damages.

The Texas-based lawsuit seeks up to $4 billion in damages. A New York suit on behalf of 75 dealers nationwide seeks at least $200 million.

Judge Hodges’s refusal to dismiss the case “is an extremely important development,” says Leonard Bellavia, an attorney in the New York lawsuit.

Were it not for that ruling, “the case would be dead,” says Nancie Marzulla, a Washington attorney representing dealers.

She calls the case a first. “It raises the larger issue of who picks up the pieces for the losers when the federal government clearly and explicitly is picking the winners.”
Dealer lawyers expect discovery issues to take most of this year. They anticipate a possible hearing on merits by late 2012 or early 2013.

Win or lose for either side, the case could end up in federal appeals court, says California attorney Harry Zanville, who represents dealers with Faulkner.

Bellavia foresees it ultimately going before the U.S. Supreme Court.

In his ruling, Judge Hodges says, “The question of what constitutes a ‘taking’ for purposes of the Fifth Amendment has proved to be a problem of considerable difficulty.”

He adds, “Plaintiffs should have the opportunity to develop a case that may turn out to be unique.”

As attorneys for marine dealers, the calls we are receiving lately are becoming far too frequent and have a common refrain: “My floor planner doesn’t know it yet, but I am seriously out of trust.”

The good news is that dealers are acting pre-emptively by not waiting to call us until spring when the boats that have been paid for are delivered and the bank discovers the problem. Too many times, dealers contact us after the horse is out of the barn and the floor planner has taken the matter to court.

First of all, it is unfortunate that the economy is presenting challenges, serious ones, to boat dealers. It is more enjoyable to represent dealer clients in times of growth, when they need a lawyer to represent them for expansion, such as buying additional property and acquiring additional product lines.

Boat dealers have not created this economic downturn. They are victims of the housing debacle from subprime loans, escalating gas prices, the economic effects of the war and the various other non-marine industry causes for the slump in boat sales. If there is any correlation at all, it is in the irony that the very lenders who hold their floor plans are the same lenders who issued credit to borrowers who probably should not have been approved in the first place. In a sense, marine lenders were just as liberal as mortgage lenders in granting loans to subprime borrowers.

Why is this relevant?
Simply because these retail lenders, who fund boat loans by allowing the negative equity in a trade-in to be rolled into a brand new loan on a more expensive boat, are sustaining losses because of increased default trends by consumers. Typically, these retail customers were referred to the lender by boat dealers. Consider the substantial savings to banks that issue marine loans by not having to pay millions of dollars on marketing to consumers because a loyal network of boat dealers refers hundreds of millions of dollars of loan business to these lenders. In contrast to home and car buyers, purchasers of boats are generally unfamiliar with specific banks that issue marine loans. They cannot be assured that their own lenders issue boat loans. Consequently, marine lenders have a more genuine basis to refer to boat dealers as “business partners.”

When a downturn in the retail marine industry occurs, as it has, it is inappropriate for lenders to respond precipitously in acting with full legal force against a dealership that has fallen out of trust with its floor planner. To be sure, banks have rights that need to be enforced. There should not be a “cookie cutter” response, however, to each dealer who has fallen behind in floor plan payoffs. This is especially true in a weakened economy, where blame cannot be placed on mismanagement at the dealership level.

The best illustration of an overreacting banking community is to take the scenario of widespread dealer floor plan defaults to an absurd extreme. Imagine the standard procedure of a bank when it discovers an “out-of-trust” situation at one of its dealers. It demands full payment of the unpaid amount within three days. It suspends all drawing privileges on all boats, sold or unsold. If there is no prospect of immediate payment, it goes to court for an order of seizure to repossess the dealer’s inventory.

Now multiply the above procedure by the many dealers who will likely be discovered this spring as being “out of trust.” Consider the value of the new boat inventory. How will the lender dispose of the inventory? Will other dealers be willing to accept these units when they are struggling to retail their own inventories? What impact will forcing a high number of dealers out of business have on future business generations?

After all, haven’t these very dealers been a huge source of profits to floor plan lending institutions over many years, even decades. If a bank has earned $5 million throughout the years from floor plan interest charges, and another $5 million from “interest income” on retail installment contracts, is it appropriate to terminate a relationship because a dealer is $500,000 in arrears on floor plan payoffs? Should losses and defaults in 2008 invalidate the $10 million worth of profits enjoyed by the lender from 1997-2007 in my example?

The answers are simple if the default is isolated to one or two dealers, and for reasons unrelated to the economy. Surely, a lender has the right to cut its losses if a dealer demonstrates an inability to become profitable again. Family issues, gambling problems and illness of a key operator are examples of how defaults can occur.

A sophisticated lender in an industry downturn will not act viscerally by pulling the plug on scores of dealerships. The lender will understand the need to take a huge step back in hard times and analyze the long-term picture, even if it means absorbing multi-million dollar losses in the short-term. This approach is not out of benevolence, but stems from the recognition that dealers are best suited, substantial floor plan defaults notwithstanding, to fetch the highest prices for the bank’s collateral (unsold boats). Of course, the bank must assess whether it is dealing with a “good customer.” Does the dealer have integrity? Has he or she been committed to the business over a long period of time? If so, the lender will likely see the benefit of allowing the dealer to remain in possession of the inventory. Consider the lender’s choice. It could repossess $2 million worth of boats and dispose of them for $1 million, thereby, adding to its losses. If the dealer has personally guaranteed the floor plan and has deep pockets, perhaps the above approach is most sound.

If a lender were to follow its standard protocol of ridding itself of defaulted dealers during bad economic times, it would simply find other, economically stronger dealers to replace them. Good luck. These dealers are economically stronger, in part, because of their unwillingness to expand in a weak market. This brings the banks full circle back to their “business partners,” through whom they have made millions of dollars over the years and know best how to retail boats. Did they suddenly become incompetent in 2008? The moral of the story is that an astute lender will know when to look past a default, however serious, if the essential elements of integrity and a long-term prospect for recovery exist. If GMAC foreclosed on all its “out-of-trust” dealers over the past five years, General Motors would have an even harder time maintaining its market presence.

To the extent a dealer may avoid the most serious consequences of being out of trust, it must act pre-emptively, generally before the lender finds out. Meeting with your franchise attorney and accountant is an essential step. More gets accomplished in a two hour brainstorming session than in months of sleepless nights, wondering what will happen when the weather turns and customers want to “splash” their paid-for boats. The business plan will need to be rewritten and difficult personnel and related overhead decisions made. The process is painstaking, but necessary.

Your advisers will then draw upon demographic data and independent industry projections to help you assess whether the business can enjoy a reasonable return on investment over the long term. If so, a presentation to your floor planner, fully disclosing the loan defalcation, may be appropriate. After the predicable havoc it will create, level heads will eventually prevail. The negotiations will then begin with the lender, your manufacturer, your landlord and others to rebuild this business with certain necessary concessions, commitments and waivers by all concerned.

In those instances where we conclude, along with the client, that there is no likelihood of economic recovery, that realization can be empowering to the dealer. It allows the dealer to come to terms with the end of the business operation, and focus all his or her energies on an exit strategy and a future. The process is cleansing and puts an end to the day-to-day stress, even if it means continuing problems with creditors.

The foregoing is achieved only by advance planning with qualified industry professionals. When dealers turn their problems over to attorneys and accountants, the reduction in their stress levels is palpable, perhaps the most important step in the process.

Founding partner of the law firm Bellavia Gentile & Associates, LLP, Leonard A. Bellavia is a nationally recognized authority in the field of marine and automotive franchise law. Bellavia is endorsed by the Marine Retailers Association of America. He chairs the Litigation Section of the National Association of Dealer Counsel and serves on its board. LBellavia@DealerLaw.com
Originally Posted on 21 April 2008 in Soundings Trade Only Today

Two rejected Chrysler dealerships that won their arbitration cases in 2010 are closer to a trial date in their lawsuit against the automaker.

In a March 9 ruling, U.S. District Court Judge Leonard Wexler denied a Chrysler motion seeking dismissal of the dealerships’ complaint. He told the parties to file their pretrial orders.

Leonard Bellavia, lawyer for the dealerships, said the ruling means the trial should be in 60 to 90 days.

Bellavia declined further comment, other than to say he hopes his clients and Chrysler “can come together and work out an amicable solution.” He wouldn’t say whether there are active settlement discussions.

The dealerships — Eagle Auto Mall Corp. of Riverhead, N.Y., owned by Mark Calisi; and Terry Chrysler-Jeep of Burnt Hills, N.Y., owned by Charlie Morris — sued Chrysler in August 2010, alleging that they received “unreasonable and unconscionable” letters of intent to enter into a franchise agreement after their arbitration victories.

The dealerships, which closed in 2009 as part of Chrysler’s bankruptcy restructuring, sought reinstatement, compensation for lost income and punitive damages.

Two other dealerships — Crossroads Superstore of Atoka, Okla., and Westminster Dodge of Dorchester, Mass. — were part of the original lawsuit but have since settled with Chrysler. Both Chrysler and Bellavia declined to comment on settlement terms. The dealerships did not reopen.
Chrysler’s motion seeking the lawsuit’s dismissal followed a December court ruling in the company’s favor.

In December, the court ruled it did not have jurisdiction to confirm arbitration awards. The court also said the plaintiffs were entitled only to a letter of intent under terms that were “usual and customary” at the time of the offer and not those governing prebankruptcy dealership agreements.

Whether the plaintiffs received such an offer “remained an open question,” the court said. The plaintiffs say the letters were not customary and put onerous conditions on them, such as having to complete a facility renovation prior to reopening.

Chrysler Group spokesman Mike Palese said the December ruling rejected the dealerships’ primary argument that they were entitled to automatic entry into the post-bankruptcy Chrysler’s dealer network.

“As we have contended since the beginning of this process, Chrysler Group complied fully with the letter and intent of the law by issuing its customary and usual [letter of intent] to prevailing dealers, which was the only remedy available under the federal dealer arbitration law,” Palese wrote in an e-mail.

“Chrysler Group will continue to defend this position vigorously and is confident in our position.”

The auto industry’s bailout may have been put in reverse after a judge ruled that 75 terminated Chrysler dealers have the right to sue the United States Treasury for violating their Fifth Amendment rights.

The dealers, all represented by Leonard Bellavia of Bay Shore-based Bellavia Gentile & Associates, had their property seized as part of a $12.5 billion federal bailout between 2008 and 2009. The government ordered Chrysler to terminate 789 franchises as part of the government-led bankruptcy.

Bellavia said since the government ordered the taking, it should be classified as an eminent domain issue and the dealers should be compensated accordingly. The 75 dealers are seeking more than $200 million in restitution.

“Simply because the government arranged to have this seizure of private property carried out by a third party – Chrysler – it is no less a ‘taking’ under long standing principles of constitutional law,” Bellavia said.

Judge Robert Hodges Jr. ruled Monday that the Chrysler dealers could bring a lawsuit against the U.S. Treasury. As a result, Bellavia and other involved attorneys may now seek the depositions of Timothy Geithner, Steven Rattner, and other high-ranking officials of the U.S. Treasury and the Obama administration.

“We fully intend to prove at trial that President Obama’s Automotive Task Force conditioned the bailout of Chrysler on a requirement that it close 25 percent of its dealerships nationwide,” Bellavia said. “The president and his task force believed that a Chrysler liquidation would destroy the U.S. economy and terminated these dealers on the belief that this had to be done for the public good. My clients, however, lost their entire life’s work without just compensation.”

Now that the judge has ruled against the government, Bellavia said he expects more of the 789 terminated Chrysler dealerships to join the lawsuit.

Dealers terminated during Chrysler’s 2009 bankruptcy will be allowed to proceed with a lawsuit against the US Treasury Department, alleging the government violated the Constitution in taking their store franchises.

A ruling handed down Monday by the US Court of Federal Claims denied the government’s motion to dismiss the case. The lawsuit, filed in February 2011, contends that the Obama administration violated the Fifth Amendment, which says private property shall not “be taken” for public use “without just compensation.”

The suit also alleges the terminations violated state legal rights by taking the franchises without adequate compensation.

“We received a very important decision today,” the dealers’ attorney, Leonard Bellavia of Mineola, N.Y., said Monday. He added: “After this decision, I expect those dealers sitting on the sidelines to join the case.”

So far, 75 eliminated dealers have signed on to the suit, which seeks at least $200 million.

A Treasury department spokesman referred questions to the US Department of Justice. A DOJ spokesman declined comment. Chrysler isn’t named in the lawsuit.

The Treasury’s auto task force, which was then headed by financier Steven Rattner, asked Chrysler and General Motors to make deeper cuts than the companies had originally planned.

As part of Chrysler’s restructuring, 789 US dealers were terminated, representing about one-quarter of the automaker’s US dealer body.

The decision clears the way for the case to move to discovery, Bellavia said. He added that he’ll be seeking depositions from Treasury’s auto task force.

On November 18th, Leonard Bellavia and John Gentile held a seminar for NYSADA members in the Albany area. The seminar addressed: Factory Demands for Facility Upgrades and the Dealers Best Strategy’s, GM’s EBE Program – How to Deal with Objections, and Warranty Parts Reimbursement. The dealer members present peppered the attorneys with a mix of specific scenarios affecting their dealerships. Several of the dealer attendees commented that this seminar was extremely informative and left them in a better position to respond to factory pressures.

A regularly quoted source of comment for Automotive News, Mr. Bellavia is also a regular speaker for national automotive and marine related trade organizations. He serves as Chair of the Automotive Franchise Law Section of the Franchise Law Committee of the New York State Bar Association and has been named Chairperson of the Litigation Section of the National Association of Dealer Counsel (“NADC”) and a member of its Board of Directors. Since joining with Leonard Bellavia in 1991, Mr. Gentile has personally handled hundreds of buy/sell transactions over his years in practice and is considered an expert in automotive warranty parts reimbursement.

The administrator handling Saab Cars North America’s finances told creditors last week that the company will be liquidated.

“We notified creditors that it is our opinion that there is no way to salvage the company,” said Jim McTevia, of McTevia & Associates, the administrator appointed to operate the U.S. distribution arm.

Parent company Saab Automobile filed for liquidation Dec. 19 in a Swedish bankruptcy court. Saab Cars North America suspended operations that day.

Saab Cars North America “laid off probably 80 percent of the employees” on Jan. 13, said McTevia.

He said he is seeking a buyer for the U.S. parts distribution business, which he described as the only meaningful asset.

Tim Colbeck, president of Saab Cars North America, expects a buyer for the parts business will be found by the end of February. “There still will be a market for parts,” Colbeck said. The question is whether there will be a U.S. distributor for parts.”

McTevia said he told creditors: “There is no money to keep the company going until someone figures out what to do.”

He added: “They have some parts inventory, which we started distributing. There are no new parts coming in.”

Leonard Bellavia, the lawyer representing 161 of Saab’s 188 dealerships, said he expects dealers to decide this week or next whether to file for a Chapter 7 involuntary bankruptcy or wait for the administrator to liquidate the company. The dealers’ decision will be based on which option potentially gives them a greater portion of the proceeds.

McTevia said the U.S. entity is “probably going to go on for a while because there is all kinds of litigation. There are assets to be liquidated.” The company’s headquarters in Royal Oak, Mich., near Detroit, will be closed by the end of February.

Bellavia estimates the liquidated assets have a value of between $75 million and $125 million, including $25 million owed by General Motors for warranty work. He estimates liabilities at $10.5 million.

Saab resumed parts distribution to dealers on Thursday, Jan. 19. The operation was suspended Dec. 19.

Over 140 of the 188 Saab dealers nationwide have retained the law firm of Bellavia Gentile & Associates, LLP, to represent the dealers in their claims against Saab Cars, N.A., a subsidiary of the Swedish car manufacturer, Saab Automobiles. Saab Automobiles filed for Bankruptcy in Sweden on December 19, 2011.

“Saab dealers are owed substantial amounts from Saab Cars N.A. for warranty repairs and incentive payments. Right now we are identifying and marshaling the assets which should be made available to pay our dealer clients and enable them to provide parts and
warranty repairs for their customers”, said Leonard A. Bellavia, Senior partner at the firm. Bellavia continued; “Our firm has gone up against all of the major automobile manufacturers to protect the rights of dealers. The manufacturers know and respect us, so we believe that we can cut through a lot of the acrimony which typically exists and reach a resolution that will benefit the dealers”.

Ultimately, it is Mr. Bellavia’s hope that all Saab dealers join the group. “There is strength in numbers” said Bellavia, “which provides dealers with the ability to level the playing field with the manufacturers”.

After numerous attempts to sell the assets of Saab Automobiles to investors with the hope of keeping U.S. Saab dealers viable, General Motors, which owns certain critical technologies licensed to Saab, effectively blocked any potential sale. The result has left U.S. Saab dealers in turmoil as they question the ability to sell remaining vehicle inventories the value of which may be compromised due to the manufacturer’s inability to honor vehicle warranties.

Faced with these issues, Saab dealers, through their National Dealer Council have retain ed the nationally acclaimed dealership law firm of Bellavia Gentile & Associates, LLP to negotiate with Saab Cars N.A. and to determine what additional action may be necessary in order to protect the dealers.

About Bellavia Gentile & Associates LLP

Bellavia Gentile & Associates, LLP is a Mineola, New York based law firm with additional offices in Manhattan, Albany and New Jersey. The firm served as Co – Lead counsel for terminated dealers in the recent Chrysler bankruptcy proceedings and represents over 1,000 automobile dealers nationwide. Mr. Bellavia serves as Chair of the Litigation Section of the National Association of Dealer Counsel, an organization of over 500 attorneys nationally who concentrate in the representation of automobile dealers.

For more information about this story and to speak with Mr. Bellavia and one of the New York Saab dealers, call Cecilia Alers.