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A group of 215 disenfranchised GM dealers in Canada filed suit against the automaker Thursday, seeking $750 million in damages.
The dealers had their relationship with General Motors terminated last year as part of the automaker's restructuring. The lawsuit claims damages against General Motors of Canada, accusing the automaker of breaching franchise laws.
The dealers also named Cassels, Brock & Blackwell LLP, the law firm that the Canadian dealer group had retained in advance to advise them in the event of a GM restructuring or bankruptcy.
The lawsuit alleges that the firm "failed to disclose to the dealers that it was simultaneously acting for the Canadian government in the GM auto bailout." The allegations have not been proven in court.
The dealers claim Ottawa had insisted that GM scale back its dealer network before it would get any assistance.
"These dealers include some of the best in the country," said David Stern, a lawyer for the lead plaintiff.
"The offer they were handed gave them a fraction of what their business were worth, but they had no collective representation and precious little time," he said in a statement.
The terminated dealers said they were given only two to four days to accept the package offered.
The lead plantiff in the case is asking for court certification to proceed as a class-action case.
In the U.S., more than a fifth of the 2,800 GM and Chrysler dealers whose businesses were terminated by the automakers have filed for arbitration.
About 600 dealers have asked for arbitration as they try to get their franchises restored.
The U.S. passed a law last month that allowed the American Arbitration Association to deal with the claims.
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