GM Dealer Group Files for Bankruptcy
By Michelle Krebs September 29, 2008Bill Heard Enterprises, the nation's largest Chevrolet dealership group, filed for Chapter 11
bankruptcy over the weekend, after closing 14 showrooms and laying off nearly 3,200 employees last week.
It was not the first nor is it likely to be the last dealership to file bankruptcy. In its filing in U.S. bankruptcy Court in Decatur, Alabama, the Heard Group noted it is at least the eighth U.S. car dealer to file bankruptcy of late.
Based in Columbus, Ga., the Bill Heard dealership group operated stores in Alabama, Florida, Nevada, Tennessee and Texas as well as Georgia. It sold General Motors' Chevrolet, Cadillac and Saab brands. Trade publication Automotive News lists Bill Heard as the largest Chevrolet dealer in the U.S. and the 13th-largest dealership group in the country by volume, selling 25,000 to 30,000 new vehicles a year.
In its bankruptcy filings, according to Bloomberg News, Bill Heard listed debt and assets of $500 million to $1 billion. The 40 largest creditors without collateral backing their claims are owed a total of $7.1 million, Bloomberg reported. The company listed its largest unsecured creditors as Frost National Bank, owed $1 million plus accrued interest; Nevada Department of Taxation, owed $970,972 for estimated sales tax; and Texas Comptroller of Public Accounts, owed $911,026 for estimated sales tax.
"The difficult financing conditions the automobile industry as a whole has faced because of the subprime lending industry collapse'' contributed to the closing, the company said on its Web site.
Automotive News reports a number of other dealers are interested in the Bill Heard properties. Among them are megadealer and NASCAR team owner Rick Hendrick.
Other Dealerships Struggle
Other dealerships have filed bankruptcy or closed their doors, according to various media reports.
Johnston Shield Inc., with a Mitsubishi dealership in Tucson, Arizona and two other dealerships in the state, sought Chapter 11 bankruptcy protection in April listing more than $7 million in debt. The group blamed the downturn in the economy, Bloomberg reported.
Dave Croft Motors, a Collinsville, Ill., Chrysler dealership, filed for bankruptcy on Sept. 17. Crawford D. Croft, who founded the dealership in 1976, said he decided to file for bankruptcy after Chrysler sought more money from the dealership, Bloomberg reported.
John Evans, owner of defunct Detroit-area dealership Stu Evans Lincoln Mercury, filed for Chapter 7 bankruptcy liquidation earlier this month. He was being sued by multiple creditors in Macomb County, Mich., Circuit Court, including Ford Motor Credit LLC, which repossessed the dealership's vehicle inventory this spring, Crain's Detroit Business reported.
Courtesy Pontiac-Buick-GMC, an AutoNation Inc. dealership in Longwood, Fla., shut its doors Thursday, Sept. 25, one day after Bill Heard Chevrolet abruptly shut down in nearby Sanford. The company told Automotive News it was not due to the economy but to AutoNation's strategy to reduce the number of dealerships in saturated markets, Automotive News reported.
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