Saturn Files Separate Bankruptcy; Loses Lawsuit to NJ Dealer
By Michelle Krebs June 1, 2009By Michelle Krebs
DETROIT -- While General Motors filed bankruptcy on Monday, so, too, did its Saturn Corp., in a move that seems to set up Saturn for a buyer and, perhaps, to first cull its dealership network.
Meantime, Saturn lost a case brought by one of its once most supportive dealers in New Jersey courts last week.
In its papers filed in the same New York court as GM's bankruptcy, Saturn said filing Chapter 11 was "only opportunity for preserving" the Saturn brand and that its board approved the sale of its assets to the U.S. Treasury.
Federal bankruptcy court rules supersede the dealer-favoring state franchise laws so Saturn could shed dealers it doesn't want and keep only the ones it desires in order to pave the way for a sale. Saturn has three suitors and an announcement is expected soon on which one Saturn will go forward with.
Meantime, Saturn has lost a lawsuit in New Jersey filed by Stuart Lasser, one of Saturn's earliest retailers and most vocal supporters of the GM brand. He often joined company executives on media events to promote the brand.
A Saturn-only dealer, Lasser has three Saturn outlets in New Jersey -- Saturn of Denville, Saturn of Livingston and Saturn of Mt. Olive.
But when Saturn sales started nosediving in 2008 -- even before the September credit crisis, the onset of the recession or GM's announcement that Saturn would be sold or eliminated -- Lasser asked GM for permission to add a separate standalone Kia franchise onto the land occupied by one of his Saturn properties. GM denied his request, and Lasser filed a lawsuit against Saturn.
Last week, a New Jersey judge ruled in Lasser's favor. He continues to operate three Saturn outlets and has added a Subaru-Kia outlet on the Mt. Olive, New Jersey, property.
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