GM Generali

Generali (AQEU:GM)
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General Motors Corp.'s (GMGMQ) dealers, arguing the auto maker is unfairly forcing them out of business, plan to ask a judge to appoint a committee to represent them in the auto maker's Chapter 11 proceedings.

Former U.S. Attorney G. Douglas Jones is asking the judge overseeing GM's bankruptcy case, filed on Monday, to enlist a committee to represent the interests of hundreds of auto dealers the auto maker seeks to close, he said in a statement Wednesday.

GM on Tuesday sent letters to the dealers that are marked to close, offering them from $100,000 to $1 million to shut down without a fight, according to a dealer who received the letter.

GM is allowing dealers to stay open until October 2010, but not to order new vehicles, the letter said. They have until June 12 to accept the offer.

The auto maker has said it plans to shutter 2,400 dealerships. The company sent letters to 1,000 dealers last month informing them they are on the closing list, and more were informed Tuesday.

Jones was retained by Alabama auto dealer Abercrombie Chevrolet, Inc.

"It is important to note that these dealerships are wholly-owned and separate operating entities apart from General Motors," Jones said in the statement. "Many of these dealerships are operating companies that have successfully been in existence and turning a profit for years."

Chrysler LLC is using the bankruptcy process to shed about one-quarter of its dealers.

-By Sharon Terlep, Dow Jones Newswires; sharon.terlep@dowjones.com