Post-Dealer Arbitration Act Litigation Nearing An End

In the aftermath of the Chrysler and GM bankruptcies, Congress enacted section 747 of the Consolidated Appropriations Act of 2010 (“Dealer Arbitration Act”), which created an arbitration process by which Chrysler dealers could challenge their rejection and GM dealers could challenge their being wound down. Under the Dealer Arbitration Act, a successful dealer could obtain the following relief: “continuation, or reinstatement of a franchise agreement, or to be added as a franchisee to the dealer network of the covered manufacturer in the geographical area where the covered dealership was located when its franchise agreement was terminated, not assigned, not renewed, or not continued.” In other words, a successful dealer could be continued, reinstated, or added. In such event, the manufacturer was required to “provide the dealer a customary and usual letter of intent to enter into a sales and service agreement.”

Now, disfavored dealers were treated differently in the Chrysler and GM bankruptcies. In the Chrysler bankruptcy, the franchise agreements of disfavored dealers were formally “rejected” under section 363 of the Bankruptcy Code. On the other hand, in the GM bankruptcy, the franchise agreements of disfavored dealers were actually assumed, but subject to wind-down agreements executed during the bankruptcy. Under these wind-down agreements, GM’s disfavored dealers received a modest payment and were given time to sell off their remaining inventory and close down operations in an orderly manner. In other words, rejected Chrysler dealers were left behind in the bankruptcy whereas GM’s wind-down dealers continued on post-bankruptcy for a time with so-called New GM. That difference – outright rejection in the Chrysler bankruptcy versus assumption and wind-down in the GM bankruptcy - would prove critical in the arbitration process to come.

Following the arbitrations, successful rejected Chrysler dealers were presented with letters of intent that many of them argued violated the Dealer Arbitration Act because they did not simply reinstate those dealers but rather imposed all sorts of conditions and limitations, such as facility upgrades. In addition, a conundrum was created in instances where New Chrysler had inserted a new dealer into the territory previously assigned to the rejected dealer and that new dealer had territorial rights under their state’s automobile franchise act.

Several lawsuits were commenced around the country and the consistent result was that, although GM’s wind-down dealers could be “continued” or “reinstated,” rejected Chrysler dealers could only be “added.” This is because wind-down GM dealers were operating under existing franchise agreements with New GM, whereas rejected Chrysler dealers had no legal relationship with New Chrysler. Thus, they could only be “added” to New Chrysler’s dealer network and all they were entitled to was a “customary and usual letter of intent to enter into” a franchise agreement. From this ruling, courts also consistently held that the Dealer Arbitration Act did not pre-empt state automobile franchise laws, meaning that existing New Chrysler dealers could challenge the addition of a successful rejected dealer under a state dealer act’s relevant market area provision.

These issues are playing out in United States District Court for the Eastern District of New York in Eagle Auto Mall Corp. v. Chrysler Group LLC, Case No. 10-cv-3875 (Wexler, J.). By order dated December 23, 2011, Judge Wexler held that the plaintiff dealers were only entitled to be “added” to New Chrysler’s subject to “a customary and usual letter of intent.” Judge Wexler “interpreted this to mean that Plaintiffs were entitled to an offer under terms that were usual and customary at the time of the offer, and not those governing Plaintiffs’ pre-bankruptcy dealership agreements.” However, Judge Wexler went on to hold that whether the letters of intent offered by New Chrysler were usual and customary was a question of fact for trial and denied summary judgment. New Chrysler’s motion for reconsideration was also denied.

After close of discovery, New Chrysler again moved for summary judgment, based on the decision of the court in Los Feliz Ford, Inc. v. Chrysler Group LLC, 10-cv-6077 (C.D. Ca. April 9, 2012), which held that no issues of fact existed as to whether the letter of intent at issue there was “customary and usual”. However, by order dated September 28, 2012, Judge Wexler disagreed and adhered once again to his prior holding that issues of fact remained:

…the issue is whether the letters of intent offered to Plaintiffs here were substantially the same as those offered to dealers who were given the opportunity to be added as new franchisees to the dealer network during the same period. The court has reviews the parties submissions and cannot hold, based upon those papers alone, whether such terms were offered to the Plaintiffs here.

Eagle Auto Mall proceeded to a bench trial of December 3, 2012 and is awaiting decision following the submission of post-trial briefs.

Rejected Chrysler Dealers Commence Takings Action against the United States

On February 17, 2011, 64 former Chrysler dealers commenced a 'takings' action in the United States Court of Claims against the United States titled Alley's of Kingsport, Inc v. United States of America, Case No. 11-CV-0100. The 'takings' clause, which is found in the Fifth Amendment of the United States Constitution, provides that private property shall not be taken for public use without just compensation. A classic example of a taking occurs when the government takes private land to build a road. The takings clause of the Fifth Amendment mandates that the government pay just compensation for that land.

In this lawsuit, the former dealers assert that their automobile franchises were private property that were taken by the government for public use and, as a result, they are entitled to just compensation. The former dealers allege that Chrysler's restructuring plan did not call for the termination of dealer franchises but that the government's Automotive Task Force imposed that requirement as a condition to financing the restructuring.

Lots of Holiday Season Activity in Chrysler Bankruptcy Case (Part 2 of 3)

On December 30, 2009, New and Old Chrysler jointly filed a second motion to enforce the automatic stay and the bankruptcy court’s orders approving the sale of assets to New Chrysler and the rejection of 789 dealer agreements (the “Second Enforcement Motion”). The Second Enforcement Motion is directed to several rejected dealers that filed state proceedings to enjoin the creation of new franchises in their former markets. The rejected dealers appear to have a plausible defense: they based their state law proceedings on the recent federal arbitration law that went into effect on December 16, 2009. Those dealers argued that because they may be awarded their franchises back by an arbitrator, New Chrysler should be enjoined from filling those points until the arbitration is concluded.

Of course, Old and New Chrysler were having none of it and demanded that those rejected dealers withdraw their state proceedings. The dealers refused and the Second Enforcement Motion resulted. Because the premise underlying the state proceedings is to preserve the remedy afforded the rejected by Congress in the arbitration legislation, it will be very interesting to see how this motion plays out. A copy of the Second Enforcement Motion may be found here.

Lots of Holiday Season Activity in Chrysler Bankrptcy Case (Part 1 of 3)

Quite surprisingly, the Christmas and New Year’s holiday week was marked by several interesting filings in the Chrysler bankruptcy case relevant to dealers. First, on Christmas Day, a motion was filed seeking reconsideration of the bankruptcy court’s decision and order granting the Debtors’ motion to reject 789 dealer agreements. Second, on December 30, the Debtors and New Chrysler filed a second joint motion seeking injunctive relief and sanctions against certain rejected dealers that filed state law proceedings against New Chrysler. Third, on New Year’s Eve, Debtors’ and New Chrysler filed an adversary proceeding against Oregon, Maine, North Carolina and Illinois state officials seeking a declaratory judgment and injunctive relief to enjoin the enforcement of certain state statutes enacted or soon to be enacted that would have the effect of negating or impacting the effect of the termination of the rejected dealers’ franchises.

On Christmas Day, a small group of former Chrysler dealers whose franchise agreements were rejected filed a motion (the “Reconsideration Motion”) that asks Bankruptcy Judge Gonzalez to reconsider his opinion and order approving the rejection of their franchise agreements. The Reconsideration Motion can be found here. Rather remarkably (to say the least), the Reconsideration Motion accuses Judge Gonzalez of committing a fraud on the court by mischaracterizing the testimony of Fiat executive Alfredo Altavilla in his opinion approving the Debtors’ rejection motion (the “Rejection Opinion”).

In that regard, the Reconsideration Motion focuses on footnote 21 of the Rejection Opinion, which states, in pertinent part, that “Altavilla also responded affirmatively to a question regarding whether a dealership network needed to be for the Fiat Transaction to close, stating that a ‘restructuring needs to occur’” The Reconsideration Motion argues that the footnote mischaracterizes the actual hearing testimony which is quoted in full as follows:

Question: If this transaction closes without an absolute requirement of a particular number of dealers that are being terminated, would Chrysler still go through with this deal – I mean, rather, would Fiat still go through with this deal?

Answer: The answer is that a restructure needs to occur. Whether it occurs before or after the closing of the deal is not a material difference.

The Reconsideration Motion also argues that Judge Gonzalez ignored testimony by Chrysler executives that the Debtors’ estates received no value in exchange for accelerating the ‘rationalization’ of the dealer network through the use of the contract rejection power in bankruptcy.

As for a remedy, the dealers do not argue that New Chrysler could be forced to reinstate them; rather, they argues that the rejections can be reversed within the bankruptcy proceeding and the Debtors’ estates forced to assume those dealer agreements. They argue that would have the effect of converting claims under those previously-rejected franchise agreements from general unsecured claims (that have little chance of payment) into priority administrative expense claims (that stand a reasonable chance of getting paid, at least in part).

Rejected/Wind-Down Dealer Arbitration Bill Signed into Law

The bill granting rejected or wind-down dealers the right to arbitrate for potential reinstatement was signed into law on December 16, 2009. The various deadlines set forth in the statute are as follows:

• no later than January 15, 2010: manufacturer must provide each covered dealership with "the specific criteria pursuant to which such dealership was terminated, was not renewed, or was not assumed and assigned..."
• no later than January 25, 2010: a covered dealership must elect to pursue the right to binding arbitration provided in the legislation.
• no later than June 14, 2010: the case must be submitted to the arbitrator for decision

Once the matter is submitted, the arbitrator must issue a written decision within 7 business days thereafter. If the arbitrator rules that the dealership must be reinstated, the manufacturer must offer a letter of intent within 7 business days after the decision in rendered. The arbitrator has the authority to extend these deadlines for up to 30 days.

Congress Approves Dealer Arbitration Procedure

The House and Senate passed a bill that would give arbitration rights to the 789 Chrysler, Dodge and Jeep dealers whose sales and service agreements were rejected in the Chrysler bankruptcy and to the Chevrolet, Buick, Cadillac and GMC dealers who signed deferred termination agreements in the GM bankruptcy. The legislation does not benefit those dealers whose brand is disappearing, such as Saturn, Pontiac and, likely, Saab.

Basically, a covered dealership shall have the right to seek, through binding arbitration, the restatement of its franchise or the award of a new franchise in the same geographical area.

The legislation provides for a series of deadlines measured from the date of enactment (the "DoE") of the legislation. Within 30 days of the DoE, the manufacturer must provide each covered dealership with "the specific criteria pursuant to which such dealership was terminated, was not renewed, or was not assumed and assigned..." Within 40 days of the DoE, a covered dealership must elect to pursue the right to binding arbitration provided in the legislation. Within 180 days of the DoE, the case must be submitted to the arbitrator for decision and the arbitrator must issue a written decision within 7 business days thereafter. If the arbitrator rules in favor of the dealership, the manufacturer must provide a letter of intent within an additional 7 business days thereafter. The arbitrator may extend the arbitration deadlines for up to 30 days.

The legislation provides that the arbitrator shall balance the economic interests of the dealership, the manufacturer and the public at large. The factors to be considered include: 1) the dealership's profitability from 2006 through 2009; 2) the manufacturer's overall business plan; 3) the dealership's current economic viability; 4) the dealership's satisfaction of performance objectives as found in the franchise agreement; 5) the demographic and geographic characteristics of the relevant market territory; 6) the dealership's satisfaction of the criteria used by the manufacturer to select the dealer for termination; and 7) the length of experience of the dealership.

The arbitration shall be conducted in the state where the dealership is located and the arbitrator shall be selected from regional lists maintained by the American Arbitration Association. If the factory and dealer cannot agree, the AAA will select the arbitrator. There will be no depositions and only limited discovery. If both parties agree, the arbitration may be conducted electronically or telephonically. Each party shall be responsible for their own costs and expenses, including the fees for the arbitration. No money damages may be awarded.

Old and New Chrysler File Contempt Joint Motion Against Rejected Dealers That Commenced State Actions

On August 13, 2009, Old and New Chrysler took the gloves off and filed a joint motion accusing 11 rejected dealers of violating the automatic stay by filing state actions or proceedings after the closing of the sale against New Chrysler. The targeted dealers include 8 from Wisconsin and one each from Arkansas, Ohio and Utah. The Motion seeks not only a cease and desist order but also the award of the attorneys fees incurred by both New and Old Chrysler in bringing motion and in defending the underlying actions and proceedings. A copy of the motion may be found here.

Chrysler's Rejection Motion Granted

Closing arguments took place today in connection with Chrysler's motion to reject 789 dealer agreements. Later this afternoon the Bankruptcy Court granted the rejection motion, effective immediately. Although Chrysler accomplished a major milestone, the order ultimately entered by the Bankruptcy Court was significantly watered down compared to the order originally proposed by Chrysler. The final Order may be found here. A blackline comparison showing changes between Chrysler's originally submitted order and its final submitted order may be found here at Annex 2.

Of particular note, Chrysler agreed to reject all site control agreements related to rejected franchise agreements. Site control agreements take many forms; however, a typical site control agreement took the form of an option agreement. In a typical option arrangement, in exchange for Chrysler's participation in costs to upgrade a facility, the dealer would grant Chrysler an option to purchase or lease the dealership facilty for a below market price in the event the dealer terminated operations. Other forms of site control might involve a lease-and-lease-back arrangement. Through such site control agreements, Chrysler could effectively control the facility and property at which a rejected dealership operated.

It its original filings, Chrysler sought to maintain in place for itself such site control agreements, notwithstanding the fact that it was Chrysler itself that was causing the dealer to cease dealership operations by rejecting such dealer's franchise agreements. Apparently realizing it sought to conquer a 'bridge too far,' Chrysler ultimately agreed that if it rejected a franchise agreement, it would also reject any site control agreement related thereto.

Chrysler's 363 Sale Motion Granted

As expected, Bankruptcy Judge Authur Gonzalez issued an order granting Chrysler's motion, pursuant to section 363 of the Bankruptcy Code, seeking authorization sell substantially all of its operating assets to the entity affectionately known as New Chrysler. New Chrysler will be owned by Fiat S.p.A., the United Auto Workers Voluntary Employee Benefits Association and the American and Canadian governments. Notably absent from the assets Chrysler is selling to New Chrysler are franchise agreements with 789 Chrysler, Dodge and Jeep dealers. Those agreements are the subject of Chrysler's motion to reject which is set for a hearing to begin on June 3.

Dealers Object to Chrysler's Section 363 Sale Motion

Chrysler dealers that were designated for rejection in Chrysler's May 14 motion have wasted no time intervening in the bankruptcy proceeding. Although objections to Chrysler's Rejection Motion are not due until May 26, several groups of dealers filed their objections on May 19 to Chrysler's earlier Section 363 Sale Motion, which is set for a hearing on May 27. Dealer opposition is led by the Ohio-based firm of Squire Sanders & Dempsey LLP, representing the "Committee of Chrysler Affected Dealers." Squires Sanders was retained under the auspices of the National Automobile Dealers Association and the Chrysler National Dealers Council to represent the collective interests of those dealers designated for rejection in Chrysler's May 14 Rejection Motion. As of May 19, the Committee of Chrysler Affected Dealers is comprised of 284 dealers designated for rejection in the Rejection Motion. Here is a link to the Objection filed by Squire Sanders.

Attorneys for smaller groups of dealers and individual dealers also filed objections to the Section 363 Sale Motion (including, in the interest of full disclosure, Robinson Brog Leinwand Greene Genovese & Gluck, P.C.). Here is a link to the Objection Filed by Robinson Brog and its co-counsel Myers & Fuller P.A. Here is link to another notable objection filed by the firm of Bellavia Gentile & Associates and its special counsel, Siller Wilk LLP.

Chrysler Files Motion to Reject 789 Dealer Agreements

On May 14, Chrysler file its long awaited motion seeking an order "pursuant to Sections 105, 365 and 525 of the Bankruptcy Code and Bankruptcy Rule 6006 authorizing the rejection of executory contracts and unexpired leases with certain domestic dealers." In plain English, the motion seeks to reject the dealer franchise agreements of approximately one-quarter of Chrysler's dealer network. Opposition is due May 26 and a hearing is set for June 3.

Chrysler Not Assuming Certain Liabilities to Dealers Whose Franchise Agreements are not Assumed

The Company Disclosure Letter (the "Letter") annexed to the Master Purchase Agreement filed with the Bankruptcy Court on May 12, identifies liabilities under dealer and consumer incentive programs and liabiltiies under dealer support programs as Assumed Liabilities. However, explicitly excluded from the category of Assumed Liabilities are incentive program payments and dealer support program payments to dealers whose franchise agreements are not being assumed themselves.

Chrysler Identifies Certain Dealership Leases and Marketing Investment Program Contracts as Excluded Assets

Pursuant to the Bankruptcy Court's May 8 Bidding Procedures Order, on May 12 Chrysler filed are more complete copy of the Master Purchase Agreement among Old Chrysler, New Chrysler and Fiat S.p.A. Included is a redacted version of the Company Disclosure Letter (the "Letter"). The Company Disclosure Letter is the document where Old Chrysler identifies the assets that are to be excluded from the sale to New Chrysler ("Excluded Assets"). The Letter will be updated over time as the case progresses.

Of interest to dealers, the initial version of the Company Disclosure Letter filed on May 12 identifies 8 leases of dealership properties owned by Chrysler Realty Company LLC as Excluded Assets. The Letter also identifies the equity interests in 9 Marketing Investment Program Dealerships as Excluded Assets. Finally, the Letter identifies the equity interests in 8 Marketing Investment Program dealerships as being subject to transfer to New Chrysler, if agreed to by New Chrysler.

Order Sets Procedures and Scheduling for Assumption and Rejection of Dealer Agreements

On May 7, Judge Gonzalez signed the order approving the bidding procedures and scheduling the final hearing for the sale of substantially all of Old Chrysler’s assets to New Chrysler for May 27. Of interest to dealers, certain procedures were adopted to govern the assumption and assignment of dealer agreements in connection with the sale:

• No later than May 14, Old Chrysler must file the initial list of the dealer agreements that it intends to assume and assign over to New Chrysler.

• With the consent or at the request of New Chrysler, Old Chrysler may designate additional dealer agreements for assumption and assignment as late as 30 days after the closing of the sale transaction.

• New Chrysler has discretion whether to accept dealer agreements designated by Old Chrysler for assignment. No later than June 12, New Chrysler must file its initial list of those dealer agreements it has decided to accept and New Chrysler has up to 30 days after the closing to accept assignment of the rest of the designated dealer agreements.

• Any dealer agreement not affirmatively accepted by New Chrysler is not deemed assumed and assigned and will remain with Old Chrysler and probably be rejected.

This multi-step process of assumption, assignment and acceptance of dealer agreements provides only some glimmer of hope for dealers not on the initial list of designated dealer agreements. Borderline dealerships may be able to convince New or Old Chrysler to have them added to the list of dealer agreements designated for assumption and assignment for up to 30 days after the closing. Conversely however, New Chrysler can refuse to accept any dealer agreement designated by Old Chrysler for assignment for that same 30-day post closing period. As Yogi Berra famously said, “it ain’t over till it’s over.”

Although the initial list of dealer agreements designated for assumption and assignment is probably already set in stone, one can easily foresee New and Old Chrysler using the later stages of this process to extract concessions from dealers desperate to have their dealer agreements placed on the list designated for assumption and assignment by Old Chrysler and to have their agreements ultimately accepted by New Chrysler. In fact one such strong-arm tactic is written directly into the May 7 Order. The Order specifically states that no old-style Direct Dealer Agreements will be assigned to and assumed by New Chrysler. Dealers holding such agreements must agree to enter into the new Sales and Service Agreement in order to be assumed and assigned.

The time frame for such horse-trading may be very short. As set forth above, Old Chrysler must file its initial list of dealer agreements designated for assignment and assumption by May 14 (but may continue to designate additional dealer agreements until 30 days after closing). New Chrysler must then file its initial list of designated dealer agreements that it accepts for assignment by June 12 (but may continue to accept assignment of dealer agreement until 30 days after the closing). However, the Master Transaction Agreement among Old Chrysler, New Chrysler and Fiat contains a provision under which that contract may automatically terminate if not closed on or before June 15. If that date holds, the 30-day post closing window will close on July 14. Only then will it be over.

More Detail Emerges on Chrysler Dealer Cuts

A filing by Chrysler on May 3 has provided more detail on the scope of the intended dealer cuts. In a Chapter 11 reorganization, Chrysler is what is called the "Debtor in Possession," or DIP for short. In a Chapter 11 reorganization, the DIP is authorized to continue to operate the bankrupt company's business subject to control and oversight by the Bankrupcty Judge. Part of that oversight is a requirement that the DIP submit a budget showing how it intends to operate during the bankruptcy proceeding.

On May 3, Chrysler filed its DIP Budget for the 9 week period following its bankruptcy filing. The budget assumes the sale of substantially all of Chrysler's assets to New Chrysler is consumated.

Of interest to the dealer body are the following quotes from the DIP Budget:

• “The DIP Budget assumes that incentive payments to 25% of the Company’s dealers are not made as the Company look to reorganize its dealer network. The DIP Budget also assume that incentives…are reduced a further 50% from June 1st – July 5th.”

• “Incentives – assumes that the Company will only pay incentives to those dealers that they believe will have value to the acquiring company. Assumes that such payments represent 75% of the 13-week Cash Forecast amounts. Assumes that incentives are further reduced 50% for June 1st – July 5th.”

This confirms that Chrysler intends to pay incentives only to those dealers whose franchise agreements it plans to assume and assign over to New Chrysler. The DIP Budget assumes that 25% of the current dealer body will not receive incentive payments and that this will initially translate to a 25% reduction in the incentive payments that will be paid to dealers. And, a bit forbodingly, the DIP Budget assumes that incentive payments to dealers will be reduced by an additional 50% during the last 5 weeks of the budget period. It is not clear from the face of the DIP budget what this portends for dealer body cuts.

Details of the Sale to New Chrysler

On May 3, Chrysler filed a Motion for an Order (A) Approving Bidding Procedures and Bidder Protections for the Sale of Substantially All of the Debtors Assets and (B) Scheduling a Final Sale Hearing and Approving the Form and Manner of Notice Thereof; and for an Order (A) Authorizing the Sale of Substantially All of the Debtors Assets, Free and Clear of Liens, Claims, Interests and Encumbrances, (B) Authorizing the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases in Connection Therewith and Related Procedures.

The proposed deal is this: "Old Chrysler" will sell substantially all of its assets to "New Chrysler" free and clear of pre-petition liens, claims, interests and other encumbrances for $2 billion. Among the assets New Chrysler is purchasing are most of Old Chrysler's franchise agreements with its dealers. In addition, New Chrysler will assume certain liabilites of Old Chrylser. The assumed liabilties include certain union liabilities; warranty and product liability claims; and liabilities related to the contracts New Chrysler is taking as part of the deal.

Dealer franchise agreements will be subject to two rounds of culling under this plan. First, Old Chrysler will designate most of its franchise agreements for sale to New Chrysler. The rest will be rejected by Old Chrysler, leaving those dealers with an unsecured claim for contractual and statutory damages, which may be worth little or nothing. However, that is not the end. Old Chrysler has up to 90 days after the closing to designate additional franchise agreements for sale to New Chrysler. Conversely however, New Chrysler has up to 90 days after the closing of the sale transaction to identify dealer franchise agreements they do not wish to purchase. Those agreements will be turned back to Old Chrysler and rejected. The decision will ultimately rest with New Chrysler.

In short, while it is certainly a good sign that a dealer makes it past the first hurdle, New Chrysler will have a full 90 days after the closing to return unwanted dealers to Old Chrysler back in the bankrupcty proceeding. One might expect New Chrylser to use this power to force concessions on dealers who thought they were in the clear.

Chrysler's First day Motion Related to Dealers

Among Chrysler's First Day Motions is a motion to authorize Chrysler to honor or pay certain pre-petition obligations to its dealers. These obligations include Warranty Programs, Extended Service Programs, Sales Incentives (allowances, discounts, holdbacks, etc), Dealer Credits (overbillings, reconciliations, damaged parts, vehicle damage, etc.), and Dealer Support Programs and Promotional Allowances (joint advertising and marketing programs). Chrysler requested the authority to treat these as ordinary course payments and to continue to make them and reconcile them post- petition on the Parts Statement.

All is not good however. The motion seeks to give Chrysler sole discretion to continue or discontinue these programs and to pay its dealers or not. In other words, Chrysler could pull the plug at any time and pay some, but not all dealers.

On Sales Incentives, the motion states “The Debtors are working to balance the competing considerations of conserving estate resources against the need to provide financial support to those dealers critical to their network, and thus, to the going concern value of their assets, brands and businesses. Accordingly, the Debtors intend to exercise their discretion to honor and pay Sales Incentives carefully, taking into account such factors as a dealer’s financial need, credit risk and any objective market factors. The Debtors expect that they will pay no more than 75% of the total accrued but unpaid obligations for Sales Incentives as of the Petition Date.”

Chrysler has given notice that it only intends to honor dealer obligations to those dealers it intends to keep