As the clock winds down, Chrysler Group LLC still is winning in a large majority of cases appearing before arbitrators in American Arbitration Assn. hearings.

The scoreboard: Chrysler 71, dealers 31. Chrysler says seven decisions are pending. Final numbers are expected by the end of July.

But in a number of dealer wins, arbitrators looked beyond Chrysler and General Motors Co.’s post-bankruptcy business cases for restructuring their dealer networks.

Considerations of the public interest weighed heavily when an arbitrator in Eagle Auto Mall’s termination appeal against Chrysler Group found for the dealer, Mark Calisi.

He won back his Chrysler Jeep dealership in Riverhead, NY, after losing it last year as part of Chrysler’s sweeping dealership restructuring plan.

Calisi also operates Chevrolet, Kia, Mazda and Volvo new-car dealerships in Long Island.

A victorious Calisi tells Ward’s the arbitrator believed “it was in the best interest of the public to have a Chrysler store right on the main strip of Long Island’s” eastern end where there was no Chrysler presence.

Arbitrator Larry Biblo said in his decision, “The best thing for Chrysler and the public is to get Chrysler back to financial stability as soon as possible. This urgency, in the end, was the deciding factor in this case.”

GM has had fewer arbitration cases after agreeing to reinstate more than 660 dealers.

But in a major GM arbitration matter, an arbitrator found for Lou LaRiche Chevrolet, a 40-year store that is the only Chevrolet dealership in Plymouth, MI.

Scott LaRiche, executive manager, believes LaRiche was the first dealership in the country to win against GM. “At first we thought it was a mistake,” he says of receiving the reprieve.

“It’s hard to speculate about why we prevailed,” he says, surmising that the dealership’s strong “numbers” helped. In 2008, as other dealers reeled from the worsening economy, the dealership was 97 in sales out of 4,600 Chevrolet dealers nationwide.

Arbitrator Peter Kupelian ruled LaRiche had the resources and past track record to succeed in the upscale to middle-class market it serves.

The arbitrator took into account the dealership’s profitability, especially between 2007 and 2009, when the economic crisis was deepening.

Last year, Chrysler closed 789 dealerships, effective immediately, reducing its dealer count to about 2,400, or 25{f15fad3b04d89020a05738ee85256797e9759bd19fdd229b29bad9398df16913}.

GM announced it was reducing its 6,000-dealer network by about 2,400 dealerships in what it called a “wind down” intended to give affected dealers time to close their stores.

Reacting to the massive dealership closings, the U.S. Congress passed legislation allowing dealers to opt for arbitration hearings.

A recent government report on the termination process says some dealers lost their franchises even though they ran financially healthy businesses.

The report also indicated there was no evidence that massive dealership cuts, prodded by a federal government automotive task force, were vital to the survival of GM and Chrysler.

Further, the report says the dealership closings resulted in thousands of job losses during a recession.

Even in 2009, in wind-down status, the LaRiche Chevy store was 179th in sales among Chevrolet dealers nationwide, LaRiche says.

The store stayed open by getting new products from other dealers. “We were very tenacious,” LaRiche says. “We never gave up hope.”

Motivating him to fight was seeing everything his father, Lou, had worked for in 40 years taken away from him.

Leonard Bellavia, Calisi’s attorney in the Chrysler case, says, “The arbitrator saw that it’s not about personalities, but about selling cars and trucks. He (Calisi) is a good dealer and needs to recover fast. It’s in the best interest of the public and Chrysler to get them selling Chryslers again.”

Bellavia had successfully asked a U.S. Bankruptcy judge to unseal internal Chrysler e-mails for use in arbitration cases involving Calisi and another Chrysler dealer, Jim Tarbox of North Kingstown, RI.

Bellavia said the e-mails between Chrysler field representatives and executives criticized the dealers personally, implying the stores were closed for reasons other than performance.

In the 2009 e-mails, the two dealers were called “litigious,” “combative” and “belligerent.”

“It wasn’t a performance issue,” Calisi says.

The stinging emails were introduced as evidence in his and Tarbox’s arbitrations. “The defense in these cases is grounded in common sense,” Bellavia says.

“Why did we win?” says Calisi. “Great performance and we were well capitalized.”

He is glad to be back in business as a Chrysler dealer. Now, he says, “Chrysler needs to hit the ground running and start selling cars.”

Tarbox took a Chrysler buyout. Without naming the amount of the settlement, Bellavia says it was “substantial enough” to allow Tarbox to start a new business, possibly a new dealership representing another auto maker.

Another Bellavia client, Westminster Dodge in Boston, won its arbitration case in a July 19 decision.

With Westminster, a mainstay area dealership since the 1930s, Chrysler claimed the dealership was in a bad location.

“It was about 50 feet from a showplace Toyota dealership,” Bellavia says. “How in good faith can you argue that’s a bad location?”

The dealership had a “symbolic presence” to people in the area. “We were the only Chrysler representative in the city of Boston. There’s been no one representing Chrysler since we were dismissed,” says Bob Bickford, co-owner of the family store that sold used vehicles after Chrysler yanked its new-car franchise.

The mood at Westminster was jubilant after the arbitrator’s ruling, but the family has had a long time on the sidelines.

“We’ve had about 15 months to sit and absorb it,” Bob Bickford says of the initial closure. “But our customer base has been in our corner and very positive.”

Co-dealer Jim Bickford says “We knew we had a strong case with our location and history.”

Despite a high win ratio on its side, Chrysler has expressed disappointment in many of the cases won by dealers.

In the Calisi case, Chrysler says: “This decision undermines the federal Bankruptcy Court Order that affirmed the rationalization process used to reject the dealership agreements.”

Chrysler says “decisions to select dealers for the company’s ‘right-sized’ dealer network were carefully considered.”

GM is not commenting on the Lou LaRiche case or others in arbitration, citing dealer confidentiality.

GM sent letters to 661 dealers of the roughly 1,100 dealers who filed arbitration claims, indicating they will be reinstated.

Both Chrysler and GM say they expect the final arbitration proceedings to wrap up by the end of July. Decisions sometimes take several weeks to come down.

Dealers winning in arbitration say their next big hurdle is winning back customers who may have strayed.

“We’re excited to be part of the new GM,” Scott LaRiche says. “But I still feel horrible for those dealers who lost and never should have.”

Westminster Motors in Dorchester, which lost its status as a Chrysler dealer last year, won an arbitration ruling yesterday that restored its ability to sell new Dodge cars and trucks — making it one of only a handful of Chrysler dealerships to reverse a shut-down order.

The dealership had been selling used cars since last summer, when its agreement with Chrysler was terminated. Jim Bickford, a principal at the dealership, said he plans to start selling new Dodges within 60 days under the old name, Westminster Dodge.

A decision to shut down Westminster would have left the Boston area without a Chrysler dealer, said Leonard Bellavia, lead counsel for Westminster Dodge.

David L. Evans, the arbitrator, criticized Chrysler’s plan to service the Boston area by selling new Dodge vehicles only at a Quirk dealership in Braintree, which would also sell Jeeps and Chryslers.

“While Braintree may be only 6 to 9 miles away,’’ Evans wrote, “the excursion can be an ordeal.’’

He also praised Westminster Dodge’s record, writing that it is a “proven performer’’ in “a desirable, underserved location.’’

Thirty of 789 Chrysler dealerships ordered to shut down in May 2009 have won arbitration cases, a Chrysler spokesman said.

Chrysler Group LLC decided to close a quarter of its dealerships in an effort to reorganize after filing for bankruptcy protection. The government arranged for the Italian automaker Fiat, which currently has a 20 percent ownership stake in the company, to manage Chrysler.

After seeking bankruptcy protection, Chrysler was required to shut down dealerships to secure financing from the government, which loaned the automaker about $14 billion.

About half of the dealers entered arbitration; 7 percent have won. Most have settled, withdrawn their cases, had the cases dismissed, or lost.

“While difficult, the actions to reduce Chrysler’s dealer network were a necessary part of its viability,’’ Chrysler spokesman Michael Palese wrote in an e-mail.

Bickford said he is ecstatic. When he received a termination letter, “I was obviously devastated, because it’s something we’ve worked for all our lives.’’

“ . . . You get a letter in the mail that says, ‘We’re taking your dealership away and giving it to someone else,’ ’’ Bickford said. “Take one person’s property and give it to another one. It’s just morally wrong, you know.’’

He said his dealership was profitable in 2008 and at the beginning of 2009. But he lost money selling only used cars. “I need a new car franchise to survive,’’ he said.

Bickford said he hopes to rehire most of the employees who were let go last year. His dealership, which used to employ 46 workers, now has 28.

The arbitration decision is the first such victory for a former Chrysler dealer in Massachusetts. Chrysler has won three arbitration cases in Massachusetts, three others have been settled, and another was withdrawn.

Robert O’Koniewski, executive vice president at the Massachusetts State Automobile Dealers Association, said the decision was a win for the free market.

“If a dealership is going to survive or sink, that should be dictated by the forces of the marketplace,’’ he said.

General Motors, which filed for bankruptcy protection in 2009, also shut dealerships. GM ordered about 2,000 to close; about 35 were in Massachusetts. GM could not be reached for comment.

Last year, Chrysler Group Llc, mired in bankruptcy proceedings, terminated 789 dealerships across the country, saying it had too many for its diminished market share.

Among the terminated was one of Long Island’s largest Chrysler dealers, Eagle Auto Mall in Riverhead. Eagle was one of about 200 dumped Chrysler dealers that began to fight the auto giant in an arbitration to regain their Chrysler franchises.

Until last week, only 14 dealers nationwide had bested Chrysler in the proceedings.

Last week, Eagle Auto learned it had become the 15th to win its hearing, and it expects to begin selling Jeeps and Chryslers again within 60 days, Eagle Auto owner Mark Calisi said. Eagle Auto was also the only Long Island Chrysler dealer to regain its franchise. The others reached financial settlements with Chrysler.

“We got phone calls from all over the country,” Calisi said, referring to calls he got from people upset with Chrysler’s actions. “They wanted to make a statement.”

Chrysler said in a statement it was “disappointed” with the arbitrator’s decision, but it noted it had won 44 cases and that fewer than 30 remain to be arbitrated.

“Chrysler Group is looking forward to moving beyond the arbitration process and completing our dealer network plans,” the company said.

Leonard Bellavia, of the Mineola-based Bellavia Gentile & Associates law firm, which represented Eagle Auto and many other terminated dealerships across the country, said that in preparing for the arbitration, he had uncovered e-mails from top Chrysler executives.

Eagle Auto was officially told it was being terminated because it also sold Mazdas, Volvos and Kias, which Chrysler said was “contrary to its business model,” Bellavia said.

But the e-mails, Bellavia said, told a different story.

They said Calisi was “difficult to deal with,” Bellavia said. “He would blow the whistle on them” about auto prices and other issues, Bellavia said.

Chrysler would not comment on the e-mails.

Bellavia presented them to arbitrator Larry Biblo during a two-day hearing at a Westchester County hotel. Last week, Biblo wrote that Eagle Auto’s franchise “will be renewed.”

Calisi said the termination had its consequence on his business: It lost $18 million in revenue in the last year.

Chrysler Group LLC continues to win the vast majority of dealer arbitration cases coming before the American Arbitration Assn.

The scoreboard: As of July 9, with 73 cases completed, arbitrators decided for Chrysler in 54 cases and in19 for dealers.

More than 125 of the 418 filed arbitration cases have been dismissed, withdrawn or abandoned, says Chrysler. Less than 10 cases remain to be arbitrated by a deadline that officially is this week, but is expected to take longer than that.

The U.S. Congress ordered the arbitration after Chrysler and General Motors Co. terminated thousands of dealers as part of post-bankruptcy reorganization plans.

Chrysler says it is working to meet the statutory requirement to provide dealers who win in arbitration with a Letter of Intent within seven business days. The federal statute provides for reinstatement for dealers who win in arbitration.

“But that (reinstatement term) applies to GM because their dealers were not rejected technically,” a Chrysler spokesman says.

Chrysler immediately terminated dealers. GM, in not renewing franchises, did a so-called wind down extending to next October. GM also called back several hundred dealers on the eve of the arbitration hearings.

Chrysler says in a statement: “The company is complying with the federal statute by issuing a customary and usual Letter of Intent to dealers that prevail in arbitration and is looking forward to discussions with prevailing dealers.

“These discussions are – and will remain – private business matters.”

But attorney Leonard Bellavia of Mineola, NY, explains Section 747 is a federal reinstatement statute for GM and Chrysler dealers who were either rejected (Chrysler) or wound down (GM) in their respective bankruptcies.

“The only distinction is that in the GM case its dealers were told if they signed a ‘wind down’ agreement, which gave them up to 18 months to close along with a modest stipend, it could avoid the same immediate rejection that occurred in the Chrysler bankruptcy case,” he says.

The decisions to select dealers for the new Chrysler dealer network were carefully considered as part of Chrysler’s Genesis project, its dealer consolidation plan, the auto maker says.

“Placing all four brands under one roof in modern facilities has already resulted in enhanced profitability for the Genesis dealerships,” Chrysler says. “The decisions of a great majority of the arbitrators reflect the belief that the company’s dealer-network decisions were not only appropriate, but essential to its future success.”

Bellavia argued for dealers in their arbitration hearings that the Genesis project has been a “failure” and is “not a sensible business plan.”

His firm has handled 38 dealer arbitration cases, mostly against Chrysler. The GM cases, he says, largely were settled outside of arbitration hearings. “There’s more evidence every month showing that Genesis is not working,” he says.

Why is Chrysler prevailing in most arbitration cases? “Some dealers didn’t have attorneys specializing in automotive issues,” Bellavia says. “And Chrysler has deeper pockets than dealers do.”

At GM, it’s a different story, at least as far as its wind-down dealers are concerned. GM says that last March it offered LOIs to 666 dealers to return to the fold. Of these, 600 were reinstated, spokesman Dave Roman says. Others in the arbitration process dropped out or settled otherwise, he adds.

Once GM dealers meet the LOI terms, they will be able to start ordering new vehicles, Roman says.

Some have reported the returning number as high as 900, but GM officials say that’s misleading.

In March, Mark Reuss, GM president-North America, said the number of dealers would fall between 4,100 and 5,300. But he was “rounding off” the numbers, Roman says.

Then in mid-May, Reuss told the Associated Press GM would end up with “about 5,000 dealers,” meaning about 900 of dealers who were initially on the termination list were being brought back.

In a late-June investors meeting, GM told investors it will have about 4,500 U.S. dealers within a few months, down from 6,150 before bankruptcy.

Although GM had dropped four brands, it increased sales, Reuss said at that meeting. “We increased sales going from 6,150 dealers pre-bankruptcy to 4,500 dealers. These dealers will be the best dealers and the best network in the industry.”

He spoke of spending a lot of time on the dealer-alignment strategy.

“This (dealer network) is our competitive advantage and not easily copied over time,” Reuss told investors.

Getting the “dealer footprint right” has been a challenge inside the company, he said. The next step is “to get trust back and end arbitration. It’s been a tough process, tough on some of our people.”

GM’s large dealer network “used to be one of our main, massive strengths,” Reuss said at a recent media event. “I still think that’s true. It can be true with the right dealers.”

Whatever the final count, “the fact is we will end up with somewhere between 4,100 and 5,300 dealers when the arbitration process concludes later this summer,” GM spokeswoman Ryndee Carney says.

GM had more than 300 arbitration cases in early May, and less than 100 are scheduled for completion by July 14.

However, GM officials, citing “dealer confidentiality,” are not giving details out such as dealer names and cases “until we’re finished.”

Officially, arbitration cases have to be heard by July 14.“It will likely take a little longer than that for all of the decisions to be rendered. We expect to complete the process later this summer,” Carney says.

In bankruptcy court last year, Chrysler and GM said they had too many dealers to be competitive, because their networks were constructed when domestics had a much bigger share of the U.S. market.

They needed to whittle down to compete against the Toyota Motor Sales U.S.A. Inc. and American Honda Motor Co. Inc. and Hondas with scaled down networks.

As a result of court-ordered restructuring last year, Chrysler and GM initially said they would shed some 2,800 dealerships as part of their reorganizations.

That’s all history. As returning Chrysler Jeep dealer Mark Calisi of Eagle Auto Mall in Riverhead, NY, puts it: “Chrysler needs to hit the ground running and start selling cars.”

WASHINGTON — Chrysler Group made the wrong choice in deciding to keep open one New York state dealership and reject another, said an arbitrator who relied on performance data for both stores.

The arbitration for Terry Chrysler-Jeep in Burnt Hills, N.Y., may be the first in which comparative operating data, including sales, was used, said the Terry dealership’s lawyer, John Gentile. The data were unsealed last month by U.S. Bankruptcy Judge Arthur Gonzalez.

However, it won’t be the last such case, as Gentile’s law firm in Mineola, N.Y., plans to introduce performance figures for its clients and their competitors in two other cases. It is encouraging lawyers representing other dealers to do the same, Gentile said.

The arbitrator in the Terry case ruled that Chrysler, which moved to cut dealers last year to match sales with demand, had in effect chosen to keep open a nearby Clifton Park dealership rather than Terry, located outside Albany.

“A review of the criteria used by the covered manufacturer to terminate the covered dealership’s franchise agreement shows that the Terry dealership appeared to be a better candidate to remain an active dealer as compared to the Clifton Park dealership,” the arbitrator’s June 8 decision said.

Better performance

Arbitrator Larry Biblo compared Terry’s performance with that of the other dealer under a number of criteria.

He noted Terry’s superior floorplan status with lenders, its better financial status with Chrysler, its greater working capital and its superior sales performance.

Chrysler had chosen the dealership, eight miles from Terry Chrysler-Jeep, “due to a perceived difference in the demographic and geographic characteristics of the two,” the decision said.

That rival dealership eventually went out of business after Chrysler’s bankruptcy last year, and the location remains vacant, the arbitrator said. Chrysler had hoped to turn the Clifton Park store into a Genesis dealership that sells all of the company’s brands.

“I’m really excited about this,” said Charlie Morris, 40, who owned the Terry dealership along with his mother, Noella. “I look forward to working with Chrysler.”

Chrysler reaction

Chrysler expressed disappointment.

“The decision undermines the federal Bankruptcy Court order that affirmed the rationalization process used to reject the dealership agreements,” the company’s statement said.

Chrysler added: “While difficult, the actions to reduce Chrysler’s dealer network were a necessary part of Chrysler Group’s viability and central to the financing and partnership with Fiat. The only alternative would have been complete liquidation.”

Last month, Gonzalez unsealed data detailing each rejected Chrysler dealer’s performance.

The judge held that each dealer can get copies of the performance charts of rivals that Chrysler considered for termination.

Chrysler said last month it already was producing the data sought by individual dealers, but dealer lawyers said the company was producing only fragments of dealer performance scores in arbitration.

The law firm that secured the Bankruptcy Court order, Bellavia Gentile in Mineola, also represented Terry in arbitration.

“We couldn’t have proved that Chrysler didn’t follow its own business plan in this case without the spreadsheet data,” Gentile said.

Chrysler said it has fewer than 85 arbitration hearings left.

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Mark Calisi says he believes he lost his Chrysler-Jeep dealership on Long Island because he irritated a company executive.

Yale King was told that his Jeep and Buick-Pontiac-GMC stores near Denver were no longer wanted, even though he regularly doubled the carmakers’ sales goals.

James Painter and his 10 children cannot understand why Chrysler eliminated the two Utah dealerships they ran successfully for decades, particularly since the company allowed their immediate neighbor to open a new Chrysler dealership this month.

They are among the hundreds of dealers from all corners of the United States fighting to get back their businesses — and in many cases their good names, tarnished by implications of poor performance — through an arbitration process that will begin next week.

Chrysler and General Motors cut loose more than 2,000 dealers last year as part of their bankruptcy reorganization, but Congress is now forcing them to justify the closures after hearing so many stories of devastated families and communities.

G.M.’s top executive, Edward E. Whitacre Jr., recently said he expected “hundreds” of G.M. dealers to be reinstated.“

They’ve taken everything we own,” said Patrick Painter, one of James Painter’s sons. All three of the family’s dealerships — the Chrysler store that three generations ran for 65 years, the Chevrolet-Buick store nearby and the Chrysler store that James Painter opened 200 miles away at Chrysler’s request, spending two years away from his family to do so — were terminated over the course of two days last May, despite being profitable and debt-free.

“My mom and dad want their honor back as much as anything,” Patrick Painter said. “It’s the ultimate showing of disloyalty, after all the years we’ve been loyal to them, to take our stores.”

As of Friday afternoon, 915 dealers had filed to contest their termination, according to an executive with the American Arbitration Association, which is overseeing the review process. More than 400 were filed since Thursday and more were expected before the deadline of midnight Monday.

Leonard Bellavia, a lawyer in Mineola, N.Y., who represents about 40 dealers who have filed for arbitration, said each dealer could expect to spend at least $30,000 challenging the companies’ decisions unless a settlement was reached before arbitration. The process must finish by mid-June.

Those who lose will be out even more money and will have no further chance to appeal; winners can rejoin a company that didn’t want them any longer.

G.M. terminated about 1,300 dealers, most of which are still open because they were given until next October to wind down operations. An additional 700 dealers lost the rights to sell one or more brands but remain with G.M.

Many have been encouraged by Mr. Whitacre’s recent comments suggesting that the company might have been too aggressive in cutting dealerships and probably made some mistakes in its selections.

Chrysler, though, has taken a much harder line, insisting that large numbers of reinstatements could throw its recovery off track and hurt current dealers.

Chrysler eliminated 789 dealers, about a quarter of its network, and forced them to close last June on about four weeks’ notice. Because the cuts were made in bankruptcy, Chrysler avoided having to compensate those dealers for the franchises they lost, whereas G.M. agreed to pay an average of more than $400,000 to each dealer.

Chrysler’s chief executive, Sergio Marchionne, who was not involved in the company when the cuts were made, nonetheless defended them this month during a speech to an industry conference.

“The decision that we made, I think it was made with diligence, it was made equitably, and I think it was done fairly,” Mr. Marchionne said. “What I cannot do is unwind the last seven months of history, during which Chrysler went on and started rebuilding a distribution network on the assumption that the ruling of the bankruptcy judge was final.”

He added, “My conscience is clear.”

But former dealers hope to show arbitrators that the decisions were anything but fair. Letters that Congress required the carmakers to send dealers this month explaining the criteria used to select them have fueled claims that Chrysler was more subjective, because it provided less specific information than G.M. offered.

Mr. Calisi, who owns Eagle Auto Mall on the east end of Long Island, said he met all of Chrysler’s performance criteria and spent millions of dollars upgrading his building but was eliminated in favor of a Dodge dealer in a much older, more out-of-the-way space nearby.

In bankruptcy court, Chrysler said Mr. Calisi was chosen because Chrysler-Jeep shared his showroom with Kia, Mazda and Volvo. But he obtained internal e-mail messages among Chrysler executives, in which he was described as “too litigious” after a dispute with the company over incentives for advertising.

Mr. Calisi said the loss of Chrysler-Jeep left him unable to make his annual contribution of $500,000 to a local charity that helps mentally retarded children and adults.

“That really hurt me a lot,” he said. “Now they’re hurting innocent people. It’s not adding to the recovery of Chrysler. This was just a vendetta.”

A Chrysler spokeswoman, Kathy Graham, dismissed claims that dealers were singled out for retribution. “This wasn’t easy for anybody, but it wasn’t personal,” she said.

Though Chrysler’s sales plummeted in the second half of 2009, Ms. Graham said remaining dealers reported higher sales and profitability, which helps the company in the long term.

The terminated dealers say they could help G.M. and Chrysler even more by staying open. Mr. King said his Jeep store in Longmont, Colo., was on pace to outsell the nearby Chrysler-Dodge outlet for the year, and his G.M. store still is one of the region’s top sellers.

“I finished No. 1 in December,” he said, “and I haven’t received a new car in seven months.”

For some dealers, however, the offer of arbitration comes too late to do much good.

“The remedy would have been great back in June, July or August,” Mr. Bellavia said. “But the ship has sailed for many of them. Some have changed careers. Others have lost all their money. Many Chrysler dealers are filing simply out of the need for some personal vindication. Some clients are indifferent about whether they win; they just want their story told.”

For the Painters, who still sell used cars at their Utah dealerships, reinstatement could pose a new challenge. The Nissan dealership adjacent to their store in St. George, on the Arizona border, began selling Chrysler vehicles last week.

Family members, several of whom have had their wedding receptions in the showrooms, are confused as to why Chrysler would do that when it did not want dealers selling rival brands under the same roof.

“We think we deserve it back,” Patrick Painter said. “We’re the ones that took the chance on Chrysler and put up the facilities and gave them a real home in St. George 25 years ago. It’s simply not right to take property from somebody and give it to somebody else. That’s not America.”

On Yahoo!: Leonard Bellavia, left, attorney for one of the Chrysler dealerships, enters US Bankruptcy Court, Friday, May 29, 2009, in New York. (AP Photo/ Louis Lanzano).

On Zimbio.com: Chrysler Dealers Protest The Closing Of Almost 800 Dealerships. Leonard Bellavia (R), legal counsel for a group of Chrysler dealers slated to lose their businesses, and James Anderer, owner of Island Jeep in Lindenhurst, N.Y which is scheduled to be closed, look on at a press conference protesting the Chrysler bankruptcy plan May 26, 2009 in New York City. Chrysler faced a court hearing today about its fast-track bankruptcy plan. (Photo by Mario Tama/Getty Images) *** Local Caption *** James Anderer; Leonard Bellavia.

In The Wall Street Jounal – WSJ.com: NEW YORK – MAY 26: Leonard Bellavia (R), legal counsel for a group of Chrysler dealers slated to lose their businesses, and James Anderer, owner of Island Jeep in Lindenhurst, N.Y which is scheduled to be closed, look on at a press conference protesting the Chrysler bankruptcy plan May 26, 2009 in New York City. Chrysler faced a court hearing today about its fast-track bankruptcy plan.

On Breitbart.com: Attorney representing over 20 Chrysler dealerships Leonard Bellavia enters US Bankruptcy Court, Thursday, June 4, 2009, in New York. (AP Photo/ Louis Lanzano) 

NEW YORK, May 26 (Reuters) – A lawyer for Chrysler dealers facing closure as part of the automaker’s bankruptcy reorganization said on Tuesday he believes Chrysler executives do not support a plan to eliminate a quarter of its retail outlets. Lawyer Leonard Bellavia, of Bellavia Gentile & Associates, who represents some of the terminated dealers, said he deposed Chrysler President Jim Press on Tuesday and came away with the impression that Press did not support the plan.
“It became clear to us that Chrysler does not see the wisdom of terminating 25 percent of its dealers,” Bellavia said. “It really wasn’t Chrysler’s decision. They are under enormous pressure from the President’s automotive task force.”

He added the government task force, which he criticized for having no members with retail experience was, in effect, attacking U.S. entrepreneurs.

“What is the next task force? Shoe stores? Pizzerias?” Bellavia said at an event in Manhattan to publicize the dealers’ concerns ahead of a bankruptcy court hearing.

Chrysler [CBS.UL] notified its dealers this month it plans to eliminate 25 percent of its retail showrooms and is seeking permission from a U.S. bankruptcy judge to terminate franchise agreements with 789 of 3,181 dealers as of June 9. [ID:nN25534875]

A spokeswoman for Chrysler said the decision to cut a quarter of the dealers was “not coming from the task force.”

“Our position is that the market can’t support the number of dealers that are out there,” said spokeswoman Carrie McElwee. “This has been our plan for more than 10 years to combine Chrysler, Dodge and Jeep under one roof.”

The decision about cutting dealers took into consideration factors like location, customer satisfaction, and sales potential, she said. Nearly half of the terminated dealers also carry non-Chrysler brands, and most rely on used vehicles for the bulk of their sales.

The dealers will seek to stop the sale of Chrysler assets to a new company — owned by its union, Italy’s Fiat SpA (FIA.MI), and the U.S. government — at the bankruptcy court hearing on Wednesday.

“The problem we have is the free enterprise system is not run by the government, it’s run by business entrepreneurs,” Bellavia said. “The dealers themselves will decide if it’s not productive to go forward.”

Chrysler has more than double the number of dealers of rivals Toyota, Nissan and Honda, which each have about 1,200 retail outlets, while General Motors (GM.N) has about 6,000. But it should be up to owners to decide when to exit the business if there is not enough demand, Bellavia said.

Dealers argue closing dealerships will devastate local communities, with some 50,000 direct job losses nationwide, and as many as 200,000 indirect job losses. Part of their legalargument rests on the Fifth Amendment of the U.S. Constitution, which guarantees due process before government can take away a person’s property.

“We feel there has been a denial of constitutional due-process rights,” Bellavia said.

‘UNCONSTITUTIONAL’

“I think it’s unconstitutional,” said Jim Anderer, owner of Island Jeep in Lindenhurst, New York.

“The Fifth Amendment clearly states you cannot take another person’s property without due process or compensation. Even in eminent domain, there is an appraised price on the property being taken by the state.”

Anderer said he has been in business for 22 years and employs 48 workers. He intends to fight the plan.

“My business is being stolen from me under the guise of the bankruptcy laws, given to another dealer down the street,” Anderer said.

Chrysler has argued it needs a smaller dealer network to return to profitability. In 2008, it sold about 1 million new cars at some 3,300 dealers.

“They’ve given me no time to sell off (my inventory),” said Robert Engel, who runs two dealerships in Tenafly and Wyckoff, New Jersey. Both dealerships, which employ about 60 people, are profitable, he said.

Engel estimates two-thirds of his dealership revenue comes from service, and said he intends to stay open.

“Bankruptcy laws are being manipulated to carry out a marketing plan,” he said. “If they’re going to terminate dealers, it should only be severely underperforming dealers.”

Chrysler wants fewer but bigger dealers in central locations near highways that would carry Dodge, Chrysler and Jeep vehicles under one roof, Engel added, but the decision about who survives was “random” and set a precedent of government interference in free markets.

“We’re not giving up,” Engel said.