Could GM's road to Chapter 11 go through Harlem?

NEW YORK (Reuters) - The first fight in a General Motors Corp bankruptcy might not be over retiree benefits, bond values or supplier contracts. It could center on a Harlem dealership in New York.

Chevrolet-Saturn of Harlem Inc, with its Spanish-language signs promising dreams of car ownership, may prove pivotal to bringing what promises one of the biggest bankruptcies in history to New York.

GM owns the dealership, a rarity in a network of franchises, which may give it the hook it needs to file for bankruptcy in the Southern District of New York, favored for its proximity to nation's top law firms and the experience of the judges.

To file in a court, a company must prove it is incorporated in that district, which in GM's case is Delaware. A second test requires the debtor show the court covers its principal place of business, which in GM's case is Michigan.

The final test would be to file in a court where an affiliate has a pending case.

While none of the 174 affiliates in GM's annual report appear to qualify for New York's bankruptcy court, which has overseen mega-cases such as Enron Corp and Lehman Brothers Holding Inc, GM almost certainly has other avenues to the court.

It is just that the company could not name any. Some top executives are in New York and the company owns property in Manhattan, and the law firm advising the company, Weil Gotshal & Manges, is located in the General Motors Building on Fifth Avenue. But property and executives may not make the grade, according to bankruptcy specialists.

"They will have a heck of a fight to change venue," said Jack Williams, a professor at Georgia State University College of Law.

Large bankruptcies are rarely transferred because of where a debtor files, although filing far from the main business can upset creditors and other parties.

Miami-based Eastern Air Lines Inc filed for bankruptcy in New York, following the filing of Ionosphere Inc, a tiny affiliate that operated Eastern's hospitality lounges.

Creditors and employees were upset when Houston-based Enron went to New York.

Florida-based supermarket chain, Winn-Dixie, filed in Manhattan after a New York subsidiary filed in the district. The subsidiary had been created just two weeks earlier, setting off protests and the case was transferred to Jacksonville, Florida.

Will the Harlem dealership file for bankruptcy?

"I hope it won't come to that," said the dealership's manager, Dale Harris, who said he just started a week ago. "Ask me in two weeks."

(Editing by Andre Grenon)