In Michigan
6:20 pm
Fri June 12, 2009

Texas says GM dealer contracts break state law

AUSTIN, TX – Texas Attorney General Greg Abbott says General Motors is trying to force car dealers into contracts that violate Texas law. Abbott filed an objection Friday in GM's pending bankruptcy case in federal court in New York.

Abbott says the contracts are a "take-it-or-leave" deal that prevents dealers from selling other brands, requires them to order new GM cars they may not want to sell and alters state law regarding dealer locations.

Abbott said he doesn't think the Texas action will slow down GM's bankruptcy proceedings, but he wants the court to recognize state laws regulating dealerships.

Texas has 415 franchised GM auto dealers.