Wednesday, 23 February 2011 19:17

Three ex-dealers of Chrysler, GM in W. Pa. suing Federal Government

Three former Chrysler and General Motors automobile dealers in Western Pennsylvania have joined about 125 others nationwide in suing the federal government on the grounds that their property -- their franchises -- was taken from them without compensation or due process, according to the Pittsburgh Tribune-Review on February 23, 2011.

Verona Motor Sales, formerly Verona Jeep, is one of five dealerships in Pennsylvania and 59 nationwide that claim they are owed $130 million in damages because the federal government did not pay them when their franchises were eliminated, according to the lawsuit filed last week in U.S. Court of Federal Claims in Washington.

The lawsuit contends that when the Treasury Department forced Chrysler Group LLC to reduce its dealership network in 2009, it was done without due process under the Constitution and protection of state dealer franchise laws.

"Our property was taken illegally. We lost untold thousands of dollars," said Bert Molitierno, owner of Verona Motor Sales, now a used-vehicle dealer with sites in Verona and Penn Hills.

The Treasury became involved in the automakers’ restructuring when the government gave Chrysler and its financial arm $14 billion and General Motors Co. $50 billion in bailout money.

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