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Texas AG files objections to GM's dealership plans
June 16, 2009

Texas Attorney General Greg Abbott has Texas-size problems with General Motors Corp.'s plans for its car dealerships after bankruptcy.

Written by ERIC TORBENSON , Dallas Morning News

Gm

Texas Attorney General Greg Abbott has Texas-size problems with General Motors Corp.'s plans for its car dealerships after bankruptcy.

Abbott filed objections Friday in federal bankruptcy court that say GM would violate Texas laws regulating dealer competition

"In an unprecedented move, GM – which will be majority owned by the federal government – claims that states' rights and states' laws that protect dealerships can be ignored at GM's choosing," Abbott said in a statement. "In doing so, federally owned GM guts Texas statutes that regulate car dealers – and flaunts U.S. Supreme Court precedent that upholds our state-based dealership structure."

GM filed for Chapter 11 protection on June 1 and hopes to emerge from bankruptcy as a new company in 60 to 90 days. Abbott's concerns will be considered at a hearing June 30.

Abbott said his concerns relate to GM's proposed dealership agreements, which dealers must sign to keep selling GM cars.

He contends the new agreements avoid Texas franchise laws, limit dealers' ability to sell other types of cars, overrule current laws on where dealers can be located and limit warranty claims under current Texas law.

There are 415 franchised GM dealers in Texas.

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