Études de cas

Receivership of Auto Dealership Achieves 80%+ Recovery in Three Months

J.S. Held acquiert Element Forensic Engineering, renforçant ainsi ses capacités dans le domaine de l'assurance pour les pertes matérielles importantes et les sinistres touchant les entreprises de taille moyenne partout au Canada

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Accueil·Receivership of Auto Dealership Achieves 80%+ Recovery in Three Months

Contexte

A Chrysler, Dodge, Jeep, and Ram dealership based in Northern California defaulted under a vehicle flooring facility with one of the largest US banking institutions. Our team was appointed as receiver to secure the dealership, protect the lender's collateral, and determine the best recovery strategy for the business and assets. After evaluating the collateral base, operating needs, and prospective buyer interest, our team pursued an orderly wind-down and liquidation designed to maximize proceeds for the secured lender and reduce ongoing cost exposure.

Nos conseils

As a court-appointed receiver, we recovered more than 80% of the secured lender's flooring balance exposure in just three months. Our strategic process included:

  • Securing & Protecting Key Dealership Assets: Assumed control of dealership operations, secured the premises, verified inventory exceeding 100 vehicles, preserved books and records, and implemented controls to safeguard vehicle parts and equipment assets.
  • Negotiating OEM Vehicle Buybacks: Generated approximately $4.3M in proceeds by negotiating with a leading global automotive manufacturer to buy back 76 eligible new vehicles, thereby minimizing deductions and accelerating vehicle removal.
  • Maximizing Recovery from Non-OEM Vehicle Inventory: Generated approximately $2M in proceeds by developing and executing a sales strategy for vehicles ineligible for OEM repurchase, including negotiated bulk sales to large regional dealerships and direct strategic sales to individuals.
  • Executing a Successful Auction for Fixed Assets: Efficiently monetized high-value service equipment and parts inventories through a successful auction. Retained an auctioneer and developed a targeted marketing process that attracted more than 100 prospective buyers, generating over $150K in net proceeds.
  • Managing Operations Through an Orderly Wind-Down: After assuming control and evaluating the dealership's operational performance, negative cash flow, collateral values, and market alternatives, we determined that an orderly wind-down would maximize creditor recoveries. We negotiated a new facility lease, retained key personnel to support ongoing operations and asset sales, and managed the dealership through complete liquidation while significantly reducing operating costs and lender exposure.
  • Administering Cash Management & Court Reporting: Managed all accounting functions, including cash receipts and disbursements, maintained accounting records, and prepared periodic reports and court filings throughout the receivership.

Obstacles et nos solutions

The lender needed immediate control over dealership collateral after default under the vehicle flooring facility. Our team immediately took the following actions:

  • Secured the dealership premises and assets under court authority.
  • Verified inventory and preserved physical and electronic records.
  • Protected collateral while evaluating whether a going-concern sale or liquidation strategy would maximize recovery.
     

The vehicle inventory required fast monetization to preserve OEM buyback value. We developed and executed a targeted strategy:

  • Negotiated with one of the largest OEMs to repurchase 76 eligible new vehicles with minimal deductions, maximizing value for the lender.
  • Expedited pickup to reduce overhead and storage costs related to the vehicles.
  • Sold remaining vehicles to other large dealerships in the area and individuals.

Fixed assets needed a transparent sale process that maximized estate recovery. Our team conducted a competitive and well-marketed sale process:

  • Hired professional assistance to inventory fixed assets, which consisted of thousands of parts.
  • Interviewed accredited auction houses and negotiated auction terms and commissions.
  • Executed a marketed auction with 253 lots and more than 100 prospective buyers, resulting in over $150K in auction proceeds.

The estate needed an orderly wind-down and court-supervised closeout. We oversaw all aspects of the wind-down through final distribution:

  • Managed payroll, sales tax, lease, storage, and records retention matters.
  • Backed up electronic records and transferred required paper records to storage.
  • Prepared final accounting and distributed proceeds to the lender, resulting in 82%+ recovery.

Domaines d'activité associés

> Mises sous séquestre
Les tribunaux fédéraux et étatiques, les créanciers et les conseillers juridiques confient à notre équipe la mission d'administrateur judiciaire d'entreprises et d'entités immobilières en difficulté. Nous aidons à stabiliser les opérations et les flux de trésorerie, protéger les actifs de l'entreprise et adopter des méthodes pour optimiser le redressement financier. Notre équipe multidisciplinaire met à profit sa vaste expérience en matière de restructuration et dans divers secteurs d'activité pour prendre le contrôle, en tant qu'administrateur d'entreprises confrontées à des difficultés financières, opérationnelles et juridiques. Nous optimisons les opérations, monétisons les actifs, gérons les litiges et renforçons la valeur et le recouvrement global des créances pour les créanciers et autres parties prenantes.

 

> Solutions face aux situations difficiles
Nous proposons des solutions globales aux entreprises en difficulté et insolvables afin de maximiser leur redressement, de limiter les risques et de rétablir leur valeur. Nos experts sont mandatés pour aider les entreprises en difficulté à stabiliser leurs activités, protéger les intérêts des parties prenantes et appliquer des stratégies de redressement. Nous adoptons une approche centrée sur les opérations qui voit au-delà du bilan pour éviter toute dégradation supplémentaire et tracer la voie vers une croissance durable. Notre équipe délivre des conseils pratiques et des analyses indépendantes aux prêteurs, créanciers, conseillers juridiques, équipes de direction, conseils d'administration et investisseurs.

CONTACTS CLÉS

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Nos experts