AUTO DEALER PATRONS FIND LOANS UNPAID.

Byline: Sherry Joe Crosby Daily News Staff Writer

Bankrupt Magic Ford is leaving behind a trail of unhappy customers who complain that their credit is suffering because the Valencia auto dealership isn't paying off loans on used cars received as trade-ins.

Company representatives said they are investigating ``several'' claims by customers, some of whom have credit reports that indicate late payments on outstanding loans for cars traded in to the dealership for newer models.

``There are several,'' said James Stang, attorney for bankruptcy trustee R. Todd Neilson. ``We are working on identifying who they are and getting their loans paid off.''

The trade-ins occurred before Magic Ford and its sister dealership, Magic Lincoln-Mercury in Valencia, filed for Chapter 11 reorganization Sept. 24 in U.S. Bankruptcy Court in Los Angeles.

The attorney said Magic has enough money to pay off the liens but is seeking Bankruptcy Court approval before crediting the accounts.

``We sympathize with the predicament that these people are in,'' Stang said. ``We're moving on this very expeditiously. We're in the process of preparing motions to get those liens paid off.''

The dealerships, which employ 350 workers at 23920 and 24135 Creekside Road, remain open pending reorganization. Trustees have received serious bid proposals from six companies and individuals, including Florida billionaire Wayne Huizenga. Huizenga owns Blockbuster Entertainment Co., the Miami Dolphins, Florida Marlins and Florida Panthers.

Bidding starts at $39.4 million and could take place in December, Stang said.

According to court records, Magic has $48.8 million in assets and $46.4 million in liabilities. The company filed for bankruptcy to prevent Ford Motor Co. from taking possession of the business, which was bilked of millions of dollars by owner Norman Gray.

Customers whose car loans haven't been paid by the company said the bankruptcy has left their personal finances in turmoil.

``It's just a miserable situation,'' said Trevor Sheldon, a Sand Canyon business owner whose employee traded in a 1990 F150 truck for a 1997 model at Magic Lincoln-Mercury in September.

Magic still owes about $6,000 on the older vehicle, said Sheldon, adding that his employee now is responsible for loans on two trucks.

``My poor guy, this has gone onto his TRW. It's making his life miserable,'' said Sheldon, who waterproofs decks and balconies. ``He had a good credit record for the last 5-1/2 years, and now it's ruined.''

During the past 11 months, Sheldon said his company has leased or bought seven vehicles from Magic. But he didn't find out about the company's financial problems until his employee received a notice about late payments from credit reporting agency TRW.

``That really took us by surprise,'' Sheldon said. ``That's when we found out Magic Ford had declared bankruptcy.''

Besides Huizenga, other bidders include Grapevine Motors Inc., an Anaheim-based subsidiary of Ford Motor Co.; Cal Worthington, a Long Beach-based auto dealer who owns Dodge dealerships along the West Coast and was sued for deceptive advertising practices in 1986 by the Washington State attorney general; and Bert Boeckmann, who owns Galpin Ford and has been active in several San Fernando Valley civic and charitable organizations.