Court-appointed receiver looks for buyer for auto park shut down by bankruptcy.

Court-appointed receiver looks for buyer for auto park shut down by bankruptcy

The financial custodian of the ailing Claremont Auto Park has met with several potential buyers for the seven-franchise dealership, currently in a court-mandated receivership.

David Ray, an attorney with the West Los Angeles law firm of Saltzburg, Ray & Bergman, was appointed receiver of the megadealership Feb. 5. Since then, Ray has confronted a number of problems, including missing vehicles, damaged demonstrator cars, severe deficits and broken contracts.

"It is going to be a couple of more months before we have a real handle on this place," Ray conceded. "Meanwhile, at least 10 parties are interested in purchasing the park. They are all experienced types, people that could handle this operation."

The list of suitors includes Jack Head, the former owner of several dealerships in the Claremont Auto Park. Head still holds 20 percent of the paper from the sale of his dealerships last year to Joe Wilson, formerly an insurance executive in Chicago. Head also owns the land and the structures, for which he collects rent.

"If the price is right, I want it back," Head recently stated. "I want to make this place a legitimate auto park."

The megadealership includes franchises for Cadillac, GMC Truck, Pontiac, Hyundai, Sterling and Isuzu.

The receivership was requested by General Electric Capital Corp. GECC reportedly financed a major portion of the purchase by Wilson last year and, according to court papers, also made available to Wilson a revolving credit line of as much as $21 million. The latter was for the purposes of ongoing purchases of inventory.

"GECC was smart to put in a receiver," observed Head. "They averted a Chapter 11 bankruptcy."

Documents submitted by GECC in Los Angeles Superior Court allege that Claremont Auto Park failed to pay GECC almost $3 million in required payments. The declaration also stated that Claremont Auto Park had failed to provide required monthly financial statements and failed to comply with dealer agreements. GECC's current commitment to Claremont Auto Park is more than $16 million.

After their own investigation, GECC concluded, and stated in court papers, that Claremont Auto Park was insolvent.

"It is not GECC's policy to discuss matters in litigation," said Sarah Graber, counsel for GECC, "However, a receivership, by its nature, is an insolvency proceeding."

Jack Head has filed a separate lawsuit against Claremont Auto Park.

"Sometime in January we recognized the total failure of Claremont Auto Park," Head said. "I have not been paid rent for January, February and March." Head stated that the buildings and the 15 acres they stand on are valued at $25 million.

Ray said at least half a dozen demonstrator cars had been damaged while in possession of employees at the auto park. Ray also acknowledged that a number of cars were unaccounted for.

"They are not missing," Ray explained. "Somebody has them that is not supposed to have them."

There were also several cases in which Claremont Auto Park took vehicles in on trade with the agreement that they would pay off any outstanding debt. Owners later found that the dealership had failed to do so. Several customers found themselves making payments on their new car as well as the one they traded. Ray explained that, where possible, he was arranging to have the payoff made.