XDCX
12-09-2008, 10:41 AM
News reports indicate that Red Bluff Ford has filed for Chapter 11 Bankruptcy.
The owner of the dealership indicated that he had fallen behind in payments to Wells Fargo Bank and he plans to use Chapter 11 to reorganize the dealership. He further indicated that the dealership will continue to operate with no planned layoffs.
Here's a link to the news report: http://www.redding.com/news/2008/dec/09/red-bluff-ford-files-for-bankruptcy-protection/
There are two reasons why I thought this story was interesting:
First, I've driven by this dealership on I-5 countless times. It's a beautiful dealership but I've always thought it was big given the population of Red Bluff and the fact that there's a strong Ford dealer in Corning.
Second, why is it that most dealers simply go out of business instead of trying to renegotiate their debts in Chapter 11? Does Chapter 11 provide a dealer an option to keep the dealership going?
The owner of the dealership indicated that he had fallen behind in payments to Wells Fargo Bank and he plans to use Chapter 11 to reorganize the dealership. He further indicated that the dealership will continue to operate with no planned layoffs.
Here's a link to the news report: http://www.redding.com/news/2008/dec/09/red-bluff-ford-files-for-bankruptcy-protection/
There are two reasons why I thought this story was interesting:
First, I've driven by this dealership on I-5 countless times. It's a beautiful dealership but I've always thought it was big given the population of Red Bluff and the fact that there's a strong Ford dealer in Corning.
Second, why is it that most dealers simply go out of business instead of trying to renegotiate their debts in Chapter 11? Does Chapter 11 provide a dealer an option to keep the dealership going?