[00:00:00] Speaker 03:
20-1185 Taylor & Sons, Inc.

[00:00:03] Speaker 03:
versus United States, Mr. Marzullo.

[00:00:07] Speaker 02:
Thank you, Your Honor.

[00:00:09] Speaker 02:
The trial court made two key errors of law, which require reversal in this case.

[00:00:15] Speaker 02:
First, she failed to follow the takings liability rule established by this court in A&D Auto.

[00:00:24] Speaker 02:
And second, she failed to follow the economic impact test

[00:00:28] Speaker 02:
established by this court most recently in Anaheim Gardens.

[00:00:34] Speaker 02:
Turning first to the liability test in A&D Auto, this court announced that where the government offers financial assistance to induce or to require a third party to damage or destroy private property, that a taking may have occurred

[00:00:57] Speaker 02:
depending, of course, on the circumstances.

[00:01:01] Speaker 02:
The test that the trial court used here was quite different.

[00:01:05] Speaker 02:
She required the plaintiffs, under their burden of proof, to prove that the government forced Chrysler to file its bankruptcy, an almost insurmountable test.

[00:01:17] Speaker 02:
Now, the head of the auto team, Stephen Ratner, often referred to as the car czar, testified

[00:01:26] Speaker 02:
that dealer termination was a quote, integral part of the package that we told Chrysler was necessary to obtain financial assistance.

[00:01:38] Speaker 02:
He further testified on cross-examination that under the government's plan, under the government's plan is a quote, under the government's plan, some franchisees would remain in business and others would not under the government's plan.

[00:01:57] Speaker 02:
And he also testified that it was the government's determination that, quote, if you want the government's money and you want a chance to restructure, you're going to have to use bankruptcy.

[00:02:12] Speaker 02:
Not only do we have that testimony, but of course, we have the contractual requirement, Section 7.20 of the Bridge Loan Agreement, which requires

[00:02:24] Speaker 02:
that Chrysler submit a so-called viability plan to show how it plans to move forward.

[00:02:31] Speaker 02:
And one element of that viability plan, which had to be approved by the president's representative, in this case, Mr. Ratner, the head of the auto team, was a reduction in the dealer network based on the conclusion of the auto team that a reduction in the size of the network

[00:02:53] Speaker 02:
would be beneficial and would be required if the government is to put more public money into Chrysler.

[00:03:04] Speaker 02:
The viability plan that Chrysler submitted in an attempt to comply with 7.20 was rejected by the government.

[00:03:13] Speaker 02:
The government said that viability plan did not meet the requirements of Section 7.20 of the Bridge Loan Agreement.

[00:03:22] Speaker 02:
And one of the reasons, one of the elements that did not meet the requirements was the fact that Chrysler did not propose terminating dealers.

[00:03:33] Speaker 02:
Rather, Chrysler proposed a continuation of the so-called Project Genesis, a voluntary plan of consolidation among dealers so that they would bring all three brands under a single roof, if you will.

[00:03:49] Speaker 02:
Chrysler proposed

[00:03:51] Speaker 02:
to continue the amortization of dealerships, which was running at about 10% a year, and to also continue the voluntary consolidation of dealerships as it had been doing in prior years.

[00:04:08] Speaker 02:
The government rejected that, said it wasn't good enough.

[00:04:16] Speaker 02:
The government tries to defend the trial court by citing

[00:04:20] Speaker 02:
the Frohoff standard.

[00:04:22] Speaker 02:
Now that's a standard for determining whether a party entered a contract under duress.

[00:04:31] Speaker 02:
This is not a duress case.

[00:04:33] Speaker 02:
It's not a contract case.

[00:04:35] Speaker 02:
It's most certainly not a tort case.

[00:04:37] Speaker 02:
As a matter of fact, a just compensation case under the Fifth Amendment assumes that all of the government's actions were lawful and legal and

[00:04:47] Speaker 02:
as the court has set forward in A&D Auto that the only question is whether the financial assistance offered induced or required Chrysler in this case to take action to terminate the dealer's franchises.

[00:05:07] Speaker 01:
Mr. Marzullo, what's the best quote from A&D that says that

[00:05:17] Speaker 01:
Coercion is automatically present when the financial terms induced or required a specific effect on a third party.

[00:05:34] Speaker 02:
I'm not sure, Your Honor, that there's exactly that quote.

[00:05:41] Speaker 02:
The court, as you know, grappled with

[00:05:44] Speaker 02:
the government's contention that Chrysler acted entirely on its own.

[00:05:48] Speaker 02:
And, of course, we didn't have the testimony of Mr. Ratner at that time.

[00:05:52] Speaker 02:
We didn't have the contract.

[00:05:53] Speaker 02:
The court didn't have the benefit of paragraph 7.20.

[00:05:58] Speaker 02:
So what the court was talking about was, well, if you're trying to determine whether Chrysler acted entirely on its own, entirely voluntary,

[00:06:09] Speaker 02:
And therefore, there was no government action.

[00:06:11] Speaker 02:
And I think that's the key question.

[00:06:13] Speaker 02:
The government claimed it had nothing to do with the termination of these two.

[00:06:18] Speaker 01:
Right, right.

[00:06:19] Speaker 01:
But it seems to me there's some distance between saying entirely voluntary and that there's a spectrum of activities here, entirely voluntary.

[00:06:32] Speaker 01:
a requirement that would induce or a offer of assistance that would require induced action and coercion.

[00:06:41] Speaker 01:
And I guess I'm not quite remembering that we equated in A and D the second and third things, the inducement or requirement on the one hand and coercion.

[00:06:55] Speaker 01:
And I guess I take it that the CFC essentially read the decision

[00:07:01] Speaker 01:
to require that not every, or to say that not every requirement or inducement would be, would amount to coercion, you still have to ask a question about whether it was sufficiently, I don't know, bad to amount to coercion.

[00:07:24] Speaker 02:
I think that's kind of right, Your Honor, if I may, because the other problem with the trial court's formulation of forcing Chrysler to file bankruptcy is that that was not the financial inducement or the financial aid that resulted in the termination of the dealers.

[00:07:50] Speaker 02:
Bankruptcy was a step

[00:07:53] Speaker 02:
in the process, but what the trial court did was to limit her inquiry then to saying, well, the board of managers of Chrysler got together, they all voted to do this, and they all said they voted voluntarily to file bankruptcy, so that's okay.

[00:08:10] Speaker 02:
Well, consider the slippery slope that that creates.

[00:08:14] Speaker 02:
Is it possible then for the government, which would be liable for taking if they did it themselves, to simply offer financial assistance to some

[00:08:23] Speaker 02:
third party and have that third party voluntarily say yes I'll take your money and I will destroy these people's property and that way the government will not be liable.

[00:08:34] Speaker 02:
I think that's what the court was trying to avoid in setting up the A&E rule.

[00:08:40] Speaker 01:
Would you mind switching to the second topic because as I understand it the judgment could rest independently on

[00:08:53] Speaker 01:
the finding, if the finding were error-free, that in the absence of the challenged government action, there would have been no value, or rather, more precisely, you did not prove a positive value that the government action then took from you.

[00:09:14] Speaker 02:
Yes, certainly, Your Honor.

[00:09:16] Speaker 02:
And I think the best articulation of that test is the Court's recent decision

[00:09:23] Speaker 02:
in March of this year in Anaheim Gardens that a commercial property that is established for the purpose of providing income is, that economic impact for taking purposes is measured by the change in that profitability, if you will, over time.

[00:09:46] Speaker 03:
Well, what are the facts?

[00:09:48] Speaker 02:
It can be.

[00:09:49] Speaker 02:
Yes.

[00:09:50] Speaker 02:
Thank you, Your Honor.

[00:09:52] Speaker 02:
That is an allowable method.

[00:09:55] Speaker 03:
But that's not the basis on which the claims court rejected your evaluation testimony.

[00:10:02] Speaker 03:
She said the proof of fair market value rather than income was necessary.

[00:10:11] Speaker 03:
But she made many other findings which

[00:10:15] Speaker 03:
would seem to defeat your valuation theory, didn't she?

[00:10:21] Speaker 02:
I would respectfully assert, Your Honor, that she did not.

[00:10:28] Speaker 02:
That is, the undisputed facts are that these dealers were profitable.

[00:10:34] Speaker 02:
They were in business.

[00:10:35] Speaker 02:
They were selling cars.

[00:10:36] Speaker 02:
They were servicing automobiles, Chrysler automobiles.

[00:10:40] Speaker 02:
on the date of taking, which was established this April 30th of 2009.

[00:10:46] Speaker 02:
They were even still doing those same things on June 9th, 2009, the day the court issued the order requiring them to close and to shutter.

[00:10:59] Speaker 02:
At that time, there were 397,600, almost 400,000

[00:11:05] Speaker 02:
brand new Chrysler automobiles that had not yet been sold.

[00:11:11] Speaker 02:
There were 31 million Chrysler automobiles on the road that would now or later require servicing.

[00:11:20] Speaker 02:
Someone had to sell those new cars.

[00:11:23] Speaker 02:
Someone had to service those existing automobiles.

[00:11:28] Speaker 02:
Our contention is that these dealers were in business doing that.

[00:11:32] Speaker 03:
Now maybe if there were no more cars... Your theory, as I understand it, is that there would have been a Chapter 7 liquidation, but that it would have been an orderly liquidation which would have allowed these dealers to continue to engage in business for some period of time, and that you could calculate the value of the franchises by

[00:11:57] Speaker 03:
using that income screen, right?

[00:12:03] Speaker 02:
Yes, Your Honor.

[00:12:04] Speaker 02:
With this exception, I think the Chapter 7 liquidation is sort of independent of the dealer's income stream.

[00:12:14] Speaker 02:
The dealer's income stream resulted from the sale of cars that they had already purchased.

[00:12:20] Speaker 02:
Remember that a dealer purchases the automobiles that are in the showroom.

[00:12:26] Speaker 02:
They owned the cars, they owned the equipment to service the automobiles, and they owned the right, the intellectual property, to be able to sell cars as certified used cars under the Chrysler brand.

[00:12:43] Speaker 02:
So all of that would have continued.

[00:12:46] Speaker 03:
But the property here is the franchise agreement.

[00:12:50] Speaker 03:
She found that in a but for world,

[00:12:54] Speaker 03:
that there would have been a Chapter 7 liquidation and an immediate rejection of the franchises.

[00:13:05] Speaker 03:
So under that finding, how would it be that the franchise agreements had value?

[00:13:12] Speaker 02:
That finding is legally incorrect, Your Honor.

[00:13:14] Speaker 02:
A rejection occurs under 11 USC 363, as it did in the real world here, that is,

[00:13:22] Speaker 02:
there can be a rejection of contracts only if there is a sale of assets.

[00:13:28] Speaker 02:
That is, it is linked to the sale of the assets.

[00:13:31] Speaker 02:
So when Chrysler sold its assets to the new fiat, Chrysler Corporation, it was able to reject contracts and accept others under section 363.

[00:13:44] Speaker 02:
In a chapter 7, there is no sale of the assets in this sense, and thus no rejection of contracts.

[00:13:52] Speaker 02:
absolutely wrong under bankruptcy law.

[00:13:57] Speaker 02:
I'll reserve the rest of my time if the court has no further questions.

[00:14:02] Speaker 03:
OK.

[00:14:02] Speaker 03:
Hearing none, thank you.

[00:14:04] Speaker 03:
We'll hear from Ms.

[00:14:05] Speaker 03:
Hosford.

[00:14:10] Speaker 00:
May it please the court.

[00:14:11] Speaker 00:
Overwhelming evidence of record supports the trial court's conclusion that the government did not coerce Chrysler to reject 789 of its 3,000 dealer franchise agreements in bankruptcy.

[00:14:21] Speaker 00:
This case should end there.

[00:14:23] Speaker 00:
But if it doesn't, the court also held in A&D that coercion is a necessary but not sufficient feature to establish takings liability.

[00:14:30] Speaker 00:
The dealers needed to show that their franchise agreements would have had value but for government action.

[00:14:35] Speaker 00:
Again, the evidence is overwhelming that if Chrysler had not received government assistance, it would have immediately shut down liquidated bankruptcy and rejected all 3,000 of its dealer franchise agreements.

[00:14:44] Speaker 01:
Can you address the very last point Mr. Marzula made?

[00:14:49] Speaker 00:
Yes.

[00:14:49] Speaker 00:
Mr. Marzula is wrong.

[00:14:53] Speaker 00:
Companies are allowed to reject executive contracts in Chapter 7.

[00:15:00] Speaker 00:
Section 365 of the bankruptcy code allows rejection.

[00:15:03] Speaker 00:
I think Mr. Marzullo was talking about 363, so he's just wrong about that as a matter of law.

[00:15:09] Speaker 00:
And I don't think there's any ultimate dispute about that as a matter of law.

[00:15:15] Speaker 01:
Now, can you, I'm sorry, can you explain at some fairly concrete level when the contracts were rejection,

[00:15:23] Speaker 01:
what were rejected.

[00:15:25] Speaker 01:
What happened to, what concrete changes did that bring about with respect to the dealers here?

[00:15:36] Speaker 01:
Is the word shutter correct?

[00:15:40] Speaker 01:
If you're talking about the dealers... Shutter with T's, not with D's.

[00:15:44] Speaker 00:
Okay, word shutter would not apply to dealers because the dealership encompasses a lot more than the franchise agreements that were rejected.

[00:15:52] Speaker 00:
All of these

[00:15:53] Speaker 00:
All of these dealers kept their physical plants.

[00:15:55] Speaker 00:
Many of them were selling other cars like Toyota or Ford.

[00:15:58] Speaker 01:
Could they sell all of the Chrysler brand vehicles that were on their lots and to which they had title?

[00:16:05] Speaker 00:
Yes.

[00:16:06] Speaker 00:
Once the branch's agreements were rejected, they could still sell the cars, but they would be more like used cars rather than used cars.

[00:16:12] Speaker 00:
But that's ultimately irrelevant.

[00:16:14] Speaker 00:
The sequence of events here is that Chrysler filed for bankruptcy on April 30.

[00:16:22] Speaker 00:
Between that time and June 9th when the franchise agreements were ultimately rejected, the dealers still were Chrysler dealers.

[00:16:31] Speaker 00:
They were allowed to do warranty work and they were allowed to sell the cars as Chrysler dealers.

[00:16:35] Speaker 00:
It wasn't until they were rejected in June that their franchise agreements were terminated.

[00:16:40] Speaker 03:
Well, I'm not understanding the relevance of that.

[00:16:43] Speaker 03:
We're talking about value in the hypothetical world.

[00:16:48] Speaker 03:
Right.

[00:16:48] Speaker 03:
where there was a Chapter 7 liquidation, a rejection of the agreement.

[00:16:54] Speaker 00:
Well, Mr. Marzullo was trying to imply that somehow these dealers could still have made money in a but for a world that didn't include financial assistance from the government.

[00:17:03] Speaker 00:
And the answer to that is a definitive no, because as our expert Mr. McKenzie testified, the trustee in bankruptcy, because of the $3.75 billion in warranty liabilities, would have immediately

[00:17:15] Speaker 00:
called for rejection of all 3,000 of the franchise agreements.

[00:17:19] Speaker 00:
So in a buck for a world, those franchise agreements had zero value.

[00:17:23] Speaker 03:
And that's important.

[00:17:24] Speaker 03:
And the claims court found that testimony credible, right?

[00:17:28] Speaker 00:
Yes, she did find that credible.

[00:17:29] Speaker 00:
But that wasn't the only evidence.

[00:17:33] Speaker 00:
There was documentary evidence, both in connection with the bridge loan made in December of 2008 and the viability plan that was submitted in February of 2009,

[00:17:45] Speaker 00:
that Chrysler recognized that if it liquidated in bankruptcy under Chapter 7, all of its dealerships would be closed.

[00:17:54] Speaker 00:
And Mr. Nardelli, the CEO of Chrysler, also testified that if they had, in a Chapter 7 bankruptcy, all the dealerships would be gone.

[00:18:07] Speaker 00:
It would be lights out.

[00:18:08] Speaker 00:
That's the term he used.

[00:18:10] Speaker 00:
So there was no dispute at trial about whether or not

[00:18:15] Speaker 00:
There was no dispute among fact witnesses or documents about whether or not plaintiffs would have had any value in a buck-for-a-world.

[00:18:22] Speaker 00:
The only testimony that plaintiffs put on was their experts, and Judge Firestone reviewed all the 12 experts, reviewed all the fact testimony, reviewed the 542 exhibits that were submitted, and she decided, based on this overwhelming evidence, that plaintiffs did not meet their burden of showing that they would have had economic value in a buck-for-a-world.

[00:18:45] Speaker 00:
There's just no question about it, but we don't even need to get there if the court finds that there was no coercion here, and there most definitely was not.

[00:18:56] Speaker 00:
Mr. Marzula suggested that somehow the December 2008

[00:19:04] Speaker 00:
bridge loan agreement required plaintiffs to reject dealers.

[00:19:07] Speaker 00:
That is not true.

[00:19:08] Speaker 00:
That agreement called for rationalization of the dealership network, which could be a reduction by any means, and the only reason that provision was in there was because when Chrysler went to the government in 2008 seeking that bridge loan, they said they needed to reduce their dealership network.

[00:19:23] Speaker 00:
I would also point out that plaintiffs conceded a closing argument that that bridge loan was not coerced.

[00:19:28] Speaker 00:
They entered into that loan voluntarily.

[00:19:30] Speaker 00:
So it's argument, if plaintiffs are right and they were co-worked that that required them to reject the alerts, which they're not, they voluntarily agreed to do that.

[00:19:39] Speaker 00:
They've conceded that.

[00:19:40] Speaker 00:
But even setting that aside, after plaintiffs obtained their $4 billion bridge loan, which required them to establish that they would be viable and able to pay the loan, they submitted their viability plan in February of 2009.

[00:19:55] Speaker 01:
In that plan, they said that... Can I just be clear?

[00:19:59] Speaker 01:
When you keep saying they, you don't actually mean the planktists.

[00:20:03] Speaker 01:
You mean DeFord Cut Chrysler?

[00:20:06] Speaker 01:
I mean Chrysler.

[00:20:06] Speaker 01:
I apologize for that.

[00:20:08] Speaker 01:
It makes rather a big difference, doesn't it?

[00:20:10] Speaker 00:
I'm sorry.

[00:20:12] Speaker 00:
Chrysler.

[00:20:12] Speaker 00:
Chrysler submitted its viability plan.

[00:20:16] Speaker 00:
And in the first meeting after submitting that plan, they met with the auto team and said that they had too many dealers and that it was bad for their brand.

[00:20:25] Speaker 00:
Then in April 2009, a month prior to Chrysler's bankruptcy, Chrysler sent the government a presentation stating that bankruptcy offered Chrysler an opportunity to reject hundreds of unwanted dealers.

[00:20:36] Speaker 00:
That's in Appendix 15-817.

[00:20:38] Speaker 01:
Now, can I just, this is a little bit of a detour, but it would help me.

[00:20:43] Speaker 01:
Did you understand as an economic matter why Detroit Chrysler thought it would be better off if it had

[00:20:52] Speaker 01:
a shrunken dealer network?

[00:20:56] Speaker 00:
Well, as Mr. Marzullo made reference to for years, Chrysler had been experiencing financial difficulties.

[00:21:06] Speaker 00:
And one of the things they thought that would help them deal with those financial difficulties would be to go to more of a sort of Toyota approach to selling cars where you have all of your brands under one roof.

[00:21:18] Speaker 00:
And before the

[00:21:21] Speaker 00:
they realized that they had like one Dodge dealer in one part of town and one Jeep dealer in the other part of town.

[00:21:27] Speaker 00:
So they wanted to put them all under roof.

[00:21:30] Speaker 01:
Maybe let me just ask one more question in the long run.

[00:21:33] Speaker 01:
Why, help me understand as an economic matter, why Detroit Chrysler would think that putting them under one roof was a helpful thing?

[00:21:42] Speaker 00:
Because then there's only, for one thing, there's more cost involved with having multiple dealerships.

[00:21:48] Speaker 01:
But don't the dealers bear those costs?

[00:21:52] Speaker 01:
Not Chrysler, not Detroit Chrysler?

[00:21:55] Speaker 00:
Right, but the dealers are the ones who are sort of, you know, establishing the goodwill and the image of the company.

[00:22:01] Speaker 00:
And they had nicer facilities, they could have bigger facilities, and better brands if they were all under one roof.

[00:22:11] Speaker 00:
Okay.

[00:22:13] Speaker 00:
And that was what Project Genesis was all about.

[00:22:15] Speaker 00:
And Project Genesis preceded the

[00:22:18] Speaker 00:
the financial crisis by at least a year.

[00:22:22] Speaker 00:
This is not something that came about just as a matter because of the financial crisis.

[00:22:27] Speaker 00:
This is a long-standing plan by Chrysler.

[00:22:30] Speaker 03:
And then so one... Can I understand what your position is?

[00:22:34] Speaker 03:
Are you saying that maybe the evidence showed that the government coerced them to go into bankruptcy but that they didn't coerce them to reject the franchise agreements?

[00:22:49] Speaker 00:
No, the evidence showed that the government neither coerced Chrysler to go into bankruptcy or coerced them to reject the franchise agreement.

[00:22:58] Speaker 00:
The evidence was overwhelming that the government worked with Chrysler to try to find a way to achieve viability.

[00:23:06] Speaker 00:
That was its goal.

[00:23:09] Speaker 00:
And there was testimony from Mr. Ratner that at one point,

[00:23:17] Speaker 00:
The government even thought there was a chance that Chrysler could restructure outside bankruptcy if its first lien lenders who had a secured loan of $6.9 billion would agree to just take $2 billion without Chrysler going into bankruptcy.

[00:23:33] Speaker 00:
The problem with that was that the secured lien holders did not want to do that.

[00:23:37] Speaker 00:
And in fact, there's a document in the record where Mr. Nardelli writes to the dealers on April 30, 2009 and says,

[00:23:48] Speaker 00:
The reason we are declaring bankruptcy is because we were not able to settle or get concessions from our secured lenders.

[00:23:57] Speaker 00:
So it was all at the appendix 15-862.

[00:24:01] Speaker 00:
So it was Chrysler's decision to declare bankruptcy and Chrysler's board that decided that bankruptcy in its best business judgment was the best way to go.

[00:24:12] Speaker 00:
So that's the answer to that question, Your Honor.

[00:24:17] Speaker 00:
Mr. Marzula claimed that Mr. Ratner acknowledged that the government wanted Chrysler to reject franchise agreements and bankruptcy, and that was all part of the government's plan.

[00:24:29] Speaker 00:
That's not true.

[00:24:30] Speaker 00:
As Mr. Ratner testified at Appendix 21895, he said that the government believed that dealership rationalization was necessary because Chrysler proposed it.

[00:24:41] Speaker 00:
It was only evident to the government

[00:24:43] Speaker 00:
I'm quoting him, because Chrysler told us that part of becoming viable needed to include rationalizing the dealer network.

[00:24:51] Speaker 00:
And Mr. Bloom, who was the head of the Chrysler team when the auto team came about, also testified that

[00:24:59] Speaker 00:
Although the government supported Chrysler's decision, we did not direct Chrysler to reject dealership contracts and bankruptcy, nor did we insist or require them to do so.

[00:25:06] Speaker 00:
In fact, when the government issued its written decision on the viability plan that Chrysler had submitted in February 2009, dealership reductions weren't even mentioned in that rejection of the viability plan.

[00:25:22] Speaker 00:
So it was not like the government came into this whole process and said, wow, you know what?

[00:25:27] Speaker 00:
We don't like Chrysler's dealers.

[00:25:29] Speaker 00:
We want them to get rid of them.

[00:25:30] Speaker 00:
We're going to offer them money and force them into bankruptcy so that we can do this.

[00:25:34] Speaker 00:
That was never, ever part of the plan.

[00:25:37] Speaker 00:
The whole objective of the auto team was to ensure that Chrysler as a company would be viable if the government were to invest in it and to also sort of ensure that the government

[00:25:51] Speaker 00:
would get at least some part of its money repaid.

[00:25:56] Speaker 00:
So to the extent that the dealers claim that somehow the government had this nefarious plan to get rid of dealerships, that's dealers, it's just not true.

[00:26:04] Speaker 00:
And Judge Farrisdell was convinced of that.

[00:26:07] Speaker 00:
I mean, she wrote a 180-page opinion detailing all of the testimony, all of the evidence that supported that.

[00:26:19] Speaker 00:
There was some discussion during the dealer's part of the argument about what the standards should be.

[00:26:25] Speaker 00:
And there's no question that Judge Firestone applied the correct standard.

[00:26:29] Speaker 00:
She quoted from the A&E decision.

[00:26:32] Speaker 00:
She set out the five factors that the court identified in the A&E decision.

[00:26:36] Speaker 00:
And she had to make a decision as to whether or not the government coerced Chrysler into going into bankruptcy and rejecting dealership agreements.

[00:26:44] Speaker 00:
There's just no question about that.

[00:26:47] Speaker 00:
I mean, Mr. Marzula said it was a mistake to use for her to say forced, but forced is the equivalent of coerced.

[00:26:56] Speaker 00:
And there's also no question that the court applied factors that this court identified.

[00:27:11] Speaker 00:
And then just getting back briefly to the economic loss, the Anaheim Gardens case is irrelevant given that the court found that Chrysler would have rejected all the dealers absent the government's assistance in this case.

[00:27:26] Speaker 00:
That evidence came through loud and clear and she didn't even need to get to that Anaheim Gardens issue.

[00:27:32] Speaker 00:
So unless the court has other questions, we would ask that you affirm the decision below.

[00:27:38] Speaker 03:
Okay, hearing no further questions, thank you Ms.

[00:27:40] Speaker 03:
Hosford, Mr. Marzullo.

[00:27:43] Speaker 02:
Yes, I'll be quite brief, Your Honor.

[00:27:47] Speaker 02:
First, I think in answer to Judge Toronto's question, there's no doubt that the court order that issued did shudder the terminated dealers.

[00:28:02] Speaker 02:
That court order required immediately today that they cease doing business as Chrysler dealers, take down their signs,

[00:28:12] Speaker 02:
They could no longer sell used cars, new cars as Chrysler dealer, used cars as certified Chrysler dealer.

[00:28:19] Speaker 02:
They could no longer perform certified Chrysler service.

[00:28:24] Speaker 02:
That ability, the intellectual property attaching to that brand had significant value.

[00:28:32] Speaker 02:
As to the economic impact, as of any date you pick, be it the date Chrysler filed bankruptcy,

[00:28:42] Speaker 02:
the date the court order issued, these dealers were in business.

[00:28:47] Speaker 02:
And in fact, those dealers who were not terminated continued in business.

[00:28:54] Speaker 02:
So far from an absolute shutdown as contended by the trial court and by the government, on the date of filing a bankruptcy, business could have continued with the on-hand new cars,

[00:29:12] Speaker 02:
use cars, and servicing capability.

[00:29:18] Speaker 02:
If the court has no further questions.

[00:29:21] Speaker 03:
Thank you.

[00:29:22] Speaker 03:
Okay.

[00:29:23] Speaker 03:
Hearing none, thank Mr. Mozilla and Ms.

[00:29:25] Speaker 03:
Hossford.

[00:29:26] Speaker 03:
The case is submitted.

[00:29:28] Speaker 03:
That concludes our session for this morning.

[00:29:34] Speaker 00:
The Honorable Court is adjourned until tomorrow morning at 10 a.m.