April 27 2010, 10:26 AM
Look out Colorado: Chrysler is suing you. In a complaint in U.S. Bankruptcy Court in New York, the automaker alleges that legislation Governor Bill Ritter signed last month is a violation of the U.S. and Colorado constitutions. The law, meant to aid dealerships struggling in the wake of the U.S. auto industry's implosion last year, grants "terminated Colorado dealers a right of first refusal or payments if an automaker awards another nearby franchise to someone else within five years," according to The Associated Press, which adds that "the terminated dealers also could seek compensation for facility upgrades."
Michigan-based Chrysler, which emerged from bankruptcy protection last year in a partnership with Italy's Fiat Group SpA, contends that a bankruptcy court approved plans to dump 789 dealerships across the country and is now fighting dealer laws in Oregon, Illinois, and Maine. Shedding dealers was necessary, according to Chrysler. "The only alternative would have been complete liquidation of the company, which would have resulted in all 3,200 dealers closing, hundreds of thousands of lost jobs, and the company would have defaulted on billions of dollars in taxpayer loans," Chrysler says in a written statement.Colorado’s deputy attorney general for legal policy, Geoffrey Blue, told the House Business Affairs and Labor Committee earlier this year that he felt the bill was constitutional, according to the Denver Business Journal. Meanwhile, state Representative Marsha Looper, a Calhan Republican and sponsor of the bill, says, "Chrysler is crying like a spoiled-rotten child," adding the automaker "received a bailout from the taxpayers, and I don’t believe they have paid the taxpayers a penny back, and I think this is a way for them to continue to not pay a penny back.”