General Motors is suing Grossinger Auto Group, a Chicago-area dealership group, alleging it breached an exclusive-use agreement in the sale of its Chevrolet and Cadillac dealership assets to AutoCanada Inc. GM is demanding US$4.5 million for brand- related losses.
Grossinger entered into an exclusive-use agreement with GM regarding its Chevrolet and Cadillac stores in 2008, the suit says, which required that, for a 25-year exclusivity period, Grossinger would "actively and continuously conduct dealership operations for the existing model lines at the dealership premises."
AutoCanada, of Edmonton, Alberta, agreed to buy nine of Grossinger's 10 dealerships on Oct. 20. The suit alleges that GM representatives communicated with Grossinger on multiple occasions that not transferring the obligations under the exclusive-use agreement to AutoCanada would constitute a breach of the contract. Upon the closing of the sale to AutoCanada that was announced March 22, Grossinger is no longer in business.
A GM spokesman would not comment on the suit. Attempts to reach Bass Sox Mercer, a Florida law firm that assisted AutoCanada in the transaction, and Akerman law firm, which assisted Grossinger, went unanswered.