A class action lawsuit has been launched on behalf of 215 Canadian General Motors dealerships whose businesses were closed last year as part of the automaker's massive restructuring.

The lawsuit, which is seeking $750 million in damages, claims GM Canada broke franchise laws by giving its dealers at most four business days to respond to a termination package offered by the company. In addition, the dealerships were unable to negotiate as a group and didn't have group legal counsel.

Because of this, "the vast majority" agreed to the termination package rather than risk having GM file for insolvency, which the company threatened to do if the offer was rejected, according to a claim filed with the Ontario Superior Court of Justice.

GM Canada didn't end up filing for bankruptcy protection, although its parent company, General Motors Corp., did file for Chapter 11 protection in the U.S.

These dealers include some of the best in the country," said David Stern, a lawyer for the lead plaintiff.

"The offer they were handed gave them a fraction of what their business were worth, but they had no collective representation and precious little time," he said in a statement.

GM Canada sent e-mail notices to the dealers on May 20 and gave them until May 26 to respond to a compensation offer. The suit accuses the automaker of adopting “a ‘shock and awe' strategy giving the affected dealers no more than a few days to come to grips with what they were facing.

[Source: The Canadian Press]