Denny Hecker sues Chrysler Financial

[XDCX]

One of the largest Dealership Groups in Minnesota has filed a lawsuit against Chrysler Financial claiming that they unilaterally cut off financing which damaged his business.

Denny Hecker has 18 dealerships in Minnesota and employs 1,200 people.

Here's a link to the news report: http://www.twincities.com/allheadlines/ci_10975030

While it's difficult to determine what may have happened based on a single news report, it appears that CFC told Hecker that they would no longer provide financing for non-Chrysler vehicles in his rental fleet. It also appears that there must have been a SOT condition which Hecker blames on the fact that he was in the middle of switching banks.

It will be interesting to see what happens. In some ways this seem very similar to how the whole Bill Heard story started.

[SHACOS]

I'm not understanding the point of this lawsuit. How can you sue a "bank" for changing it's tactics to meet the current conditions of the market?

I'd say move on, find local institutions to meet the financing demand and support the local economy. Get over it!

[XDCX]

Originally Posted by SHACOS

I'm not understanding the point of this lawsuit. How can you sue a "bank" for changing it's tactics to meet the current conditions of the market?

I'd say move on, find local institutions to meet the financing demand and support the local economy. Get over it!

I agree, but I think there's more to the story than what the lawsuit contends.

It's hard to believe that if the SOT condition was due to a change of banks that someone at CFC couldn't resolve that matter without placing him on Finance Hold.

It's also interesting to note that Hecker has flooring agreements with Toyota and Hyundai. If CFC was too difficult to work with why didn't he just drop them and send his business to Toyota Financial?

Based on what I've read, my bet is this is not the last news report that will be written about the Hecker stores.

[XDCX]

Originally Posted by XDCX

Based on what I've read, my bet is this is not the last news report that will be written about the Hecker stores.

The latest news report issued this evening indicates that Denny Hecker has sold-off three dealerships and will be closing six others. The closing will result in the layoff of 400 employees.

Here's a link to the news report: http://www.twincities.com/allheadlines/ci_11048356

[XDCX]

If you're Denny Hecker, you probably can't wait for 2008 to get over with. It has not been a good year.

First you have your floorlines frozen by Chrysler Financial. Then you have to close six of your dealerships and lay-off hundreds of employees.

If that's not enough, you end up in the hospital after your car veers off the highway in a single car accident.

Here's a link to the news report: http://www.startribune.com/local/wes...nciaec8O7EyUsr

[okcarl]

It looks like the details around this are starting to come out. It looks like from the report in Automotive News that Hecker owed Chrysler $500 million and that he owed them $50 million personally and they decided to pull the plug.

[XDCX]

Originally Posted by okcarl

It looks like the details around this are starting to come out. It looks like from the report in Automotive News that Hecker owed Chrysler $500 million and that he owed them $50 million personally and they decided to pull the plug.

I wonder how much of that $550 Million CFC will be able to recover? This is not a good time to be trying to liquidate assets and turn them into cash.

[XDCX]

Originally Posted by XDCX

I wonder how much of that $550 Million CFC will be able to recover? This is not a good time to be trying to liquidate assets and turn them into cash.

I just read a news report that indicates that Hecker is in the process of selling off two dealerships and his remaining stores are in a state of flux.

The article also mentioned that the $550 Million claimed by Chrysler Financial represented the total amount of Hecker's credit lines, not the amount actually owed.

Here's a link to the news report: http://www.startribune.com/business/...tml?page=1&c=y