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Old 11-10-2010, 12:55 PM   #1
XDCX
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Default Q&A - Bellavia Gentile & Associates, LLP suit against the Treasury

I would like to use this thread as a "Questions and Answers" section for our members who would like more information about the lawsuit Bellavia Gentile & Associates, LLP is preparing on behalf of the rejected dealers.

The goal of this thread is simple - to provide accurate, timely information so impacted dealers can make a decision on how they should move forward.

If you have a question, please add it to this thread. I'll start off with three questions:
  • What's the current status of the proposed lawsuit?
  • Can GM Dealers participate?
  • Is there a deadline when a dealer must decide if they're going to participate?
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Old 11-10-2010, 01:17 PM   #2
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Is there a way where a dealer can participate on a 100% contingency basis only?
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Old 11-11-2010, 04:58 AM   #3
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Txflyer -- This has been the most frustrating aspect of this initiative. 789 Chrysler dealers were rejected . If you subtract the 32 that won at arbitration it leaves 757 dealers that are eligible to sue the US Treasury. I felt it would be easy to assemble a sizeable group of plaintiffs for this lawsuit. So I interviewed the top constitutional lawyers in the country to partner with me. The dilemna is that if we want the best chance of winning we can't expect the top lawyer's to work on a contingency. It's like asking a leading heart surgeon to operate for free and only get paid if the patient survives. My alternative was to find a less capable lawyer with limited experience in the Court of Federal Claims that would entertain a contingency arrangement. That is not a direction I would go despite the fact that all 757 would probably join. A case against the U.S. Government is the most labor intensive of all types of litigation as the U.S Dept of Justice has no budgetary limits and will defend the case vigorously. So if we are to sue the Gov't we need to maximize the chances of winning. Bottom line is I could not bring the top constitutional lawyers on board unless they were to get paid to cover their costs. I was able to work out a flat fee plus contingency hybrid with them, hence the $10,000 plus contingency arrangment. The reality is we need 75 dealers. We have 30 on board. it will either come together over the next few weeks or it won't. It would be a shame if it didn't as we feel strongly about the wrong that was committed. We are going to push to get this done.
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Old 11-11-2010, 05:15 AM   #4
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XDCX ---

We have 30 signed retainers. We need 45 more.

Only those GM dealers who did NOT sign Wind-Down Agreements ( I believe there were 28 dealers) can particpicate, and that is because the Wind-Down contains a Release of GM and "its shareholders" which would include the U.S Government. Except for those Chrysler deaers who won at abitration, all other rejected Chrysler dealers, including those who settled before or at abitration, are eligible.

As for a deadline to join, it is just about upon us. As of yesterday we were going to announce Dec 1st as the final date, but we will probably make it next week. The reason is we need to rush ahead of the class action that was filed by a Texas law firm so we are not saddled with bad law that may arise from the proceedings in that case, which only asserted one ( and in our opinion, rather weak) claim.

Many dealers are wiped out financially. Others want to move forward and lick their wounds. We need 75 dealers who are not willing to let this go. The Sigtarp Report is hugely helpful in proving are claims. We shall see if we get more dealers soon enough.
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Old 11-11-2010, 07:56 AM   #5
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Default Thanks for the update

Len,

Thanks for the update. I'll send an e-mail message tonight to the DealershipForum members so they're aware of this thread and the pending deadline.
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Old 11-11-2010, 08:10 AM   #6
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Thanks for the update!

Unfortunately, we sighned a wind-down (as did about 95% of the closed GM dealers) so we wouldn't be able to participate anyways.
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Old 11-12-2010, 09:09 AM   #7
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Welcome Len,

I, as well as many other dealers, wasn't aware of this alternative; Your statement: "I was able to work out a flat fee plus contingency hybrid with them, hence the $10,000 plus contingency arrangment"

I was only aware of the Grouping A,B,C,D & E rate structure, which was enormous.

As you know I had two dealerships "Taken"

Jim
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Old 11-12-2010, 10:37 AM   #8
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Jim - great post.

One of the goals of this thread was to convey accurate information so dealers could make informed choices.

While I haven't followed the fee schedule too closely I recall a number of dealers lost interest on the Conference Call when the fees were expected to be about $30K per store.

Hopefully Len can provide more details about the $10K plus contingency arrangement.
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Old 11-14-2010, 10:03 AM   #9
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Hi Jim --

The concensus from the dealers on the conference calls was not to have a fee structure at 30k but to base it instead on the Group ( A-E) designation by Chrysler. So we revisited this and did just that. However, after realizing that not many B-E dealers were rejected, and further recognizing that unless we get participation from enough dealers or we wont get the case off the ground, we are inviting all dealers to join at the Group A structure. To do otherwise, discourages B-E dealers from joining and jeopardizes the Group A dealers chances of moving forward. So if you are a Group B-E dealer and are interested, you should let me know asap. We are advising all dealers of this development. This is the final push.
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Old 11-14-2010, 11:56 AM   #10
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So,

Is this the new fee structure?
Group A-E Dealer--$ 10,000 retainer + 30% contingency fee
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Old 11-14-2010, 02:29 PM   #11
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Default Reduced Fee Structure

It will be $10,000 for all groups ( A-E). The contingency is also reduced to 25%.
Even though it seemed dealers preferred the multi-tier fee schedule, it may have worked to keep larger dealers out based upon the increased cost. The more important goal is to get enough dealers on board so the case actually gets filed, hence the reduced uniform fee.
Let's work together to get the word out. Any questions, just ask !!
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Old 12-07-2010, 12:09 PM   #12
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I still don't understand the distinction between the two different cases being referenced above (i.e. Bellavia and Faulkner), other than the fact that the Faulkner case has been described as a class action to which one must 'opt in' while Mr. Bellavia has been careful to note that his case is NOT a class action.

With as much time as I have spent speaking to attorneys in the last 18mos, my family and friends have started to accuse me of sounding like an attorney. However, I have no misconceptions; this is obviously a highly technical area of law and, consequently, I just don't have a clue WTH the differences are from a pros vs. cons perspective. I'm sure that many would appreciate a layman's description.

...I'm actually wondering if Mr. Bellavia's case is moving forward (did you get to 75?) or not, as this link has been silent for nearly a month now...

Last edited by Noah; 12-07-2010 at 12:11 PM. Reason: typo
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Old 12-07-2010, 01:17 PM   #13
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As of a week or so ago they were getting close to the needed number. If you have a serious interest just pick up a phone and give Mr Bellavia a call. He is easy to talk with and can answer all your questions.
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Old 12-07-2010, 07:45 PM   #14
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All valid questions Noah. I prepared a letter about a month ago outlining the differences between the two types if cases. I will send you a copy. Anyone else interested should e-mail me at LBellavia@DealerLaw.com and I will provide a copy. Suffice it to state that I advise against a class action for a variety of reasons, not the least of which is that you are not asserting a claim for your own financial damages, but are part of a group asserting damages in the aggregate with a committee making important decisions for you.
We are only about 4 dealers shy of starting the lawsuit. I expect that we will reach our goal over the next few days. In my post of November 11th above you will see that we were 45 dealers short of our goal. The response has been overwhelming with dozens of dealers joining over the last 3 weeks. This accounts for my silence on this website as I have been busy taking phone calls and replying to e-mails from rejected dealers.
Anyone who is unsure of the soundness of my legal theory that the Government acted without constitutional authority in conditioning the bail-out funds on cutting 25% of Chryslers dealers should read the cover story of today's Wall Street Journal, on the Money and Investments section. Some of the nation's top Constitutional Law Professors conducted a Symposium recently at Stanford University School of Law to discuss the Constitutionality of the President's use of the TARP funds. The conclusion was that it was a constitutional exercise of emergency powers of the President to use the funds to bail out insurance and banking "institutions", but that the authority granted by Congress did not extend to the bail out of the auto industry. Sure the bailout was necessary, but that does not mean that anything goes. As the SIGTARP report found, there was insufficient justification for the dealer cuts. Tomorrow I will post a link to the article.
I am happy to speak with anyone who has questions about my proposed lawsuit. Just give me a call at 516-873-3000. By the way, there were 28 GM dealers who refused to sign the GM Wind-Down Agreement . These dealers are eligible to join my case as they did not release the Government from liability. If you know any of these 28, please pass the info along. Regards to all, Len Bellavia
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Old 12-09-2010, 03:03 PM   #15
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Quote:
Originally Posted by DealerLaw.com View Post
If you know any of these 28, please pass the info along. Regards to all, Len Bellavia
Thanks for the update - I'm pleased to hear you're getting closer to your target number of dealers.

Concerning the 28 GM dealers who never agreed to the wind-down agreement, I've never seen a list of who they are. Compared to Chrysler, GM has been very tight-lipped regarding their OLDCO dealers and their arbitration results.
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