12-09-2008, 10:41 AM | #1 |
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Red Bluff Ford files Chapter 11 Bankruptcy
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...cy-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? |
04-07-2009, 08:39 AM | #2 |
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Now I know why more dealers don't file for Chapter 11
When I first posted this thread I was wondering why more dealers didn't take the Chapter 11 option and try to reorganized their business.
The most recent news release provides the answer - http://www.redbluffdailynews.com/ci_...ce=most_viewed The news report indicates that Red Bluff Ford has not been able to find another source of financing and their assets are being liquidated by Wells Fargo. At least in this instance, it appears that a Chapter 11 filing just postpones an eventual liquidation or Chapter 7 filing. |
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