State AGs reach tentative agreement with General Motors

Chris Rizo Jul. 2, 2009, 2:39pm

Jon Bruning (R)

LINCOLN, Neb. (Legal Newsline)-Thirty states have reached a tentative agreement with General Motors Corp. over concerns the troubled automaker's bankruptcy plan would trample state laws, Nebraska Attorney General Jon Bruning announced Thursday.

Bruning, who led the attorneys general in their opposition to the plan, said other states are expected to sign on to the agreement.

"We are pleased GM was willing to work with states to resolve our concerns so that consumers, dealers and the environment will continue to receive the protection of state law," said Bruning, a Republican and president of the National Association of Attorneys General.

Bruning, in an interview with Legal Newsline, said GM's bankruptcy plan would have forced current dealers to sign new agreements that would leave them with no state protections.

The Chapter 11 plan would have also disproportionately affect rural markets because some motorists would be forced to drive hundreds of miles to have their GM model serviced by a dealership.

Under the Bruning-led agreement, General Motors has agreed to acknowledge that all dealers staying with the new GM will be protected by state franchise and dealer laws and honor its express warranties and comply with state lemon laws, among other things.

"I'm confident the concessions given to the states, while of great benefit, won't interfere with the ability of new GM to function as a viable company nor should they add to the burden placed on taxpayers by the (U.S.) Treasury's purchase of GM," Bruning said Thursday.

Attorneys General Richard Blumenthal of Connecticut, Greg Abbott of Texas, Richard Cordray of Ohio and John Suthers of Colorado were on the executive negotiating committee representing the 30 states.

Bruning urged his fellow attorneys general to join him in formally opposing the company's original restructuring 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.

From Legal Newsline: Reach staff reporter Chris Rizo at

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