Canadian dealers’ $750M lawsuit against GM heads to trial

General Motors is reportedly set to defend itself in Canadian courts, as scores of former dealers seek $750 million to compensate for alleged strong-handed tactics that led them to walk away from franchise agreements as the automaker faced potential bankruptcy.

Lawyers accuse GM Canada of using “shock and awe” tactics to reduce its dealer network, giving dealers just six days to accept a one-time payout in return for terminating the franchise relationship. The company allegedly threatened that refusal would force the company to seek bankruptcy protection.

“There is no merit to any of the claims asserted by the former dealers,” GM Canada spokeswoman Adria McKenzie said in a statement to The Globe and Mail.

The company argues that it provided dealers with the legally-required notice to consider the “wind-down agreements,” which included average payouts of $600,000 for a total of $123 million. Reducing the dealer numbers was a vital provision in GM’s restructuring proposal to receive a government bailout in 2009.

The lawsuit was originally filed by 182 dealers in 2010, but is only now ready to be heard at trial.