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Old 03-15-2013, 06:22 PM   #1
ohiobuckeyes
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Default Berrang Cadillac GMC Files for BK prorection



Berrang Cadillac GMC located in Wanyesboro, Va filed for bankruptcy protection on March 1st, 2013. Berrang once sold Cadillac GMC Pontiac Chrysler Dodge Jeep brands today in 2009 he lost it all but regained Cadillac and GMC with Dealer Arbitration.

Pat Berrang had his store listed for sale in Automotive News since 2007 until late 2012.

In the petition his store had loses of 700k in 2010-2011 combined. It lists Assets of $688K and Liabilities of well over $4Million.

The liability is his facility which was built in late 2002 to house GM and Chrysler. It is also tied to his floorplan which was only 8 new vehicles and 10 used. The company did not own the new facility Pat and his wife did. He also filed for personal BK as well. This is just another shot in the arm for the "Small" dealer in rural America.


Here is the Article from the Local Newspaper.

Last edited by ohiobuckeyes; 03-15-2013 at 06:25 PM.
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Old 03-16-2013, 05:23 AM   #2
steve_biegler
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The pain of '09 continues. I pray that this family can keep their spirit up as they struggle to get their life back. I think Jim Press should have to spend 1 hour with each of these dealers that have invested a lifetime building a business only to have it stripped away.

Take a close look at that picture.....I'm not sure if the photographer realized it but I can see the Chrysler arch entrance at the right, made me gag. I need to stop now.
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Old 03-16-2013, 02:23 PM   #3
The StraightShooter
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What a waste. Building looks modern and retail friendly. Appalling that this all stems from a manufactured crisis and political false dilemma~"Shared Sacrifice."
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Old 03-18-2013, 12:57 PM   #4
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Originally Posted by steve_biegler View Post
The pain of '09 continues. I pray that this family can keep their spirit up as they struggle to get their life back. I think Jim Press should have to spend 1 hour with each of these dealers that have invested a lifetime building a business only to have it stripped away.
That's a great comment.

It's sobering to think a dealer who started his business over 35 years ago would be forced to file Chapter 7 Bankruptcy for both his business and personal finances - largely due to events beyond his control. The events since 2009 must have seemed like an un-ending nightmare with occasional moments of hope. The dealer lost both his GM and Chrysler Franchises to the OLDCO terminations and then was reinstated as a Cadillac/GMC dealer.

It's also interesting to read ohiobuckeye's post that the dealership had been listed for sale since 2007. I bet the dealer and his wife have aged 20 years in the past five.....

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Originally Posted by steve_biegler View Post
Take a close look at that picture.....I'm not sure if the photographer realized it but I can see the Chrysler arch entrance at the right, made me gag. I need to stop now.
Good catch on the arch - it appears the dealer built the facility that GM and Chrysler wanted in 2002 and both OEMs shot him in the head in 2009.
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Old 03-18-2013, 01:04 PM   #5
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Originally Posted by ohiobuckeyes View Post
This is just another shot in the arm for the "Small" dealer in rural America.
It was interesting to read that the President of the Virginia Automobile Dealers Association, Don Hall, made a similar comment. Rural dealers are often forced to conform to expensive OEM programs but they don't have the sales volume to offset the cost.

Hall also commented on the diminished profit opportunities associated with selling new cars and the need for dealerships to focus on used car sales and fixed operations to remain viable. Those same thoughts have been expressed on this forum on numerous occasions.
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Old 03-18-2013, 01:07 PM   #6
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Originally Posted by The StraightShooter View Post
What a waste. Building looks modern and retail friendly. Appalling that this all stems from a manufactured crisis and political false dilemma~"Shared Sacrifice."
I totally agree.

It's possible this dealer could have survived the recession if he didn't have to endure the GM and Chrysler terminations. After years of fighting he's left with nothing - it's just a huge waste that never needed to happen.
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Old 03-18-2013, 03:22 PM   #7
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Originally Posted by steve_biegler View Post
I think Jim Press should have to spend 1 hour with each of these dealers that have invested a lifetime building a business only to have it stripped away.
PLEEEEEASE make that hour in a locked, soundproofed room supplied with Duct Tape and an assortment of both sharp and blunt opjects...
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Old 04-05-2013, 07:20 PM   #8
ohiobuckeyes
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Update on Thursday First Bank and Trust sold the foreclosed Berrang Cadillac Gmc Facility at auction. The facility with 6 additional acres of land sold for $1.810 Million the local hospital bought the property to increase our presence in the community. The building and land appraised for $3 million with the city. Next month Mr. Berrangs personal home with be auctioned to help pay the almost $4.5 million owed.
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Old 04-06-2013, 05:49 AM   #9
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Originally Posted by ohiobuckeyes View Post
Update on Thursday First Bank and Trust sold the foreclosed Berrang Cadillac Gmc Facility at auction. The facility with 6 additional acres of land sold for $1.810 Million the local hospital bought the property to increase our presence in the community. The building and land appraised for $3 million with the city. Next month Mr. Berrangs personal home with be auctioned to help pay the almost $4.5 million owed.
Wow....I can't even find words right now
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Old 04-08-2013, 09:49 AM   #10
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Originally Posted by ohiobuckeyes View Post
Update on Thursday First Bank and Trust sold the foreclosed Berrang Cadillac Gmc Facility at auction. The facility with 6 additional acres of land sold for $1.810 Million the local hospital bought the property to increase our presence in the community. The building and land appraised for $3 million with the city.
It sounds like the local hospital scored a pretty good deal - they essentially bought a relatively new dealership with six acres for $1.2 Million "back of book."

It's too bad the facility will never house a dealership again - I'm guessing the hospital assigned almost zero value to the facility and were only interested in the property.

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Originally Posted by ohiobuckeyes View Post
Next month Mr. Berrangs personal home with be auctioned to help pay the almost $4.5 million owed.
I guess this is probably an example of why GMAC was demanding personal guarantees when they were issuing floorlines in 2009. In the old days a dealer use to be able to keep his/her assets separate so they wouldn't get wiped out if their business failed.

I wonder if there are any floorplan lenders that are issuing new lines that don't require personal guarantees?
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Old 04-08-2013, 11:09 AM   #11
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I guess this is probably an example of why GMAC was demanding personal guarantees when they were issuing floorlines in 2009. In the old days a dealer use to be able to keep his/her assets separate so they wouldn't get wiped out if their business failed.

I wonder if there are any floorplan lenders that are issuing new lines that don't require personal guarantees?
In the past, the manufacturers accepted that the vehicles themselves were all the collateral needed on the floorplan because that was the only thing the dealer OWED them for. All the parts, merchandising materials, special tools etc...were paid for up front on the monthly statement, so they could never be at risk for more than one month's bill. If they closed a dealer down and took the inventory back they just picked up the phone and sold it to another dealer...and that worked when everyone always wanted more inventory, until the early 2000's when they started to realize that due to the huge incentives and dealer cash programs keyed to certain models that it might not be so easy to unload some of the cars in a crunch. Chrysler started trying to make the dealers sign a new Master Loan Agreement in 2001 that gave them "an unconditional and absolute personal guarantee for any and all obligations now existing or which may be incurred in the future. This guaranty is of unlimited nature with no limit on the amount which you are guaranteeing, unless laws of the state in which you reside do not recognize unlimited continuing guaranties in which case it shall be limited to a maximum of $10,000,000.00." Of course they didn't mention that little change and simply advised the dealers to sign it on the spot because "the changes were just some minor legalese details that needed to be cleaned up"...and almost all of them DID sign it without ever reading through it. I suspect now all lenders require it.
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Old 04-08-2013, 07:28 PM   #12
ohiobuckeyes
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Originally Posted by XDCX View Post
I guess this is probably an example of why GMAC was demanding personal guarantees when they were issuing floorlines in 2009. In the old days a dealer use to be able to keep his/her assets separate so they wouldn't get wiped out if their business failed.

I wonder if there are any floorplan lenders that are issuing new lines that don't require personal guarantees?
Just want to clarify the Mr. Berrangs was not floored with Ally Bank. He was floored with First Bank and Trust.

I know in the past if you where a GM Motor Holdings dealers were not allow to sign a personal guarantee with GMAC since his/her money was never fully invested it was more Motor Holdings cash.
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Old 04-09-2013, 01:45 PM   #13
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Originally Posted by DealerEx View Post
In the past, the manufacturers accepted that the vehicles themselves were all the collateral needed on the floorplan because that was the only thing the dealer OWED them for. All the parts, merchandising materials, special tools etc...were paid for up front on the monthly statement, so they could never be at risk for more than one month's bill. If they closed a dealer down and took the inventory back they just picked up the phone and sold it to another dealer...and that worked when everyone always wanted more inventory, until the early 2000's when they started to realize that due to the huge incentives and dealer cash programs keyed to certain models that it might not be so easy to unload some of the cars in a crunch. Chrysler started trying to make the dealers sign a new Master Loan Agreement in 2001 that gave them "an unconditional and absolute personal guarantee for any and all obligations now existing or which may be incurred in the future. This guaranty is of unlimited nature with no limit on the amount which you are guaranteeing, unless laws of the state in which you reside do not recognize unlimited continuing guaranties in which case it shall be limited to a maximum of $10,000,000.00." Of course they didn't mention that little change and simply advised the dealers to sign it on the spot because "the changes were just some minor legalese details that needed to be cleaned up"...and almost all of them DID sign it without ever reading through it. I suspect now all lenders require it.
Great post and an excellent example of one of the "unintended consequences" of having an OEM rely too heavily on incentives to sell vehicles.

I'm guessing that most Dealers today probably have a personal guarantee with both their OEM and their flooring source. Maybe competition for flooring accounts will eliminate that requirement but I'm not betting on it.
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Old 04-09-2013, 02:00 PM   #14
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Originally Posted by ohiobuckeyes View Post
Just want to clarify the Mr. Berrangs was not floored with Ally Bank. He was floored with First Bank and Trust.

I know in the past if you where a GM Motor Holdings dealers were not allow to sign a personal guarantee with GMAC since his/her money was never fully invested it was more Motor Holdings cash.
Thanks for the clarification.

In some ways it makes sense that the flooring source was a lender other than Ally - I can't imagine Ally would have allowed the dealer to take so much time to try and resolve their situation.

It's too bad Mr. Berrang couldn't find a solution - I'm guessing he and his family will be mostly wiped out after he goes through his personal bankruptcy.
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