Bruning leads AGs' way against GM bankruptcy plan

Chris Rizo Jun. 26, 2009, 6:32pm


Jon Bruning (R)

LINCOLN, Neb. (Legal Newsline)-Nebraska Attorney General Jon Bruning is leading bipartisan efforts by state attorneys general opposed to the General Motors Corp. bankruptcy plan.

As the newly installed president of the National Association of Attorneys general, Bruning, a Republican, has decried GM's reorganization plan, saying it runs roughshod over state laws aimed at protecting consumers and dealers.

Bruning urged his fellow attorneys general to join him in formally opposing the plan. The chief legal officers from 36 states followed suit and filed their objections with the U.S. Bankruptcy Court for the Southern District of New York.

Now, NAAG's Bankruptcy Project is running point for the 37 state AGs objecting to the plan, including California, Massachusetts, Michigan, New Jersey and Pennsylvania. Texas Attorney General Greg Abbott, a Republican, filed a, objection on its own weeks earlier, Bruing said, noting that Abbott was a "prime mover" in the effort against the GM plan.

"One of the first things I did as president of NAAG was to ask my colleagues in join me in filing an objection in the GM's bankruptcy," Bruning said in an interview with Legal Newsline.

"General Motors is one of the most widely known brands in America, and many, many American families have a GM in the garage, and so I want to make sure that the owners of those automobiles -- not just in Nebraska but in every state-- have protections going forward and that GM will honor its commitments, and that they can get service in a reasonable geographic area," he added.

General Motors is seeking to close about 1,300 dealerships nationwide in an effort to emerge as a stronger, leaner company.

As a part of its reorganization, the beleaguered car maker is insisting that its current dealers sign new agreements that would leave dealers with no state protections.

"These agreements would abrogate sate law in every way, and that troubled me a great deal," Bruning said.

The Chapter 11 plan, Bruning added, would disproportionately affect rural markets because some motorists would be forced to drive hundreds of miles to have their GM model serviced by a dealership.
General Motors, which filed for Chapter 11 bankruptcy protection June 1, said at the time they hoped to emerge as a new company within 90 days.

Bruning said he and representatives from other offices have had several conference calls with executives from General Motors and officials from the U.S. Treasury Department, which is administering federal loans to the car maker.

"I think we are making progress on our concerns when it comes to abrogation of state law and federalism concerns and consumer safety," Bruning said. "I feel good we are moving in the right direction."

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

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