Sixty-four former Chrysler dealers say in the lawsuit filed Thursday that the Treasury Department failed to compensate them for the dealer closings that were approved by a bankruptcy judge. The dealers are seeking damages of at least $130 million.
Lawyers for the dealers say the closures prevented a "significant disruption" to the U.S. auto industry but the losses should not be borne by a few individual dealers. Chrysler closed 789 auto dealers, or about one quarter of its dealer network in its bankruptcy.
The Treasury Department declined comment on the lawsuit, which was filed in the U.S. Court of Federal Claims.