Glendora Companies Need Funds to Pay Creditors : Trustee Seeks to Get Car Dealers’ License Back
The trustee in control of a troubled group of Glendora car sales and finance companies will ask a bankruptcy judge Monday to force the state Department of Motor Vehicles to restore the dealerships’ sales license, allowing them to resume business.
Irving Sulmeyer, a veteran bankruptcy expert appointed to head the Grand group of companies, said the DMV’s suspension of the dealerships’ licenses has prevented the companies from producing any revenue to repay creditors. Therefore, he has requested a restraining order directing the DMV to return the licenses.
“The key to operating the business there depends on getting the license back from the DMV,” Sulmeyer said. “If we can’t do that, there is no business.”
The licenses of Grand Chevrolet, one of the largest car dealerships in the nation, and Grand Motors, an affiliated auto brokerage firm, were suspended Aug. 6 for alleged illegal business practices in the most recent of DMV penalties against the firms.
Both those dealerships and two affiliated finance companies--Grand Wilshire Finance and Grand Rizal--filed for Chapter 11 bankruptcy protection early this month. They owe creditors, including large banks and savings and loans and many individual investors, more than $250 million.
Imperial Savings & Loan of San Diego, one of the businesses’ largest creditors, is owed $174 million. But officials there say they may not be able to collect as much as $20 million of the debt because of alleged fraud at Grand Wilshire Finance.
Fraud Investigation
Imperial has evidence that the finance company forged duplicate car ownership documents, according to Richard J. Annen, the savings and loan’s senior vice president and assistant general counsel. That allowed Grand Wilshire Finance firm to sell the same multimillion-dollar loan packages to different banks, he said.
Imperial, Heller Financial Corp. of Chicago, First Los Angeles Bank and Philadelphia National Bank all were defrauded in that and other schemes, bank officials and documents allege. The district attorney’s major fraud unit has launched an investigation of the Grand companies.
Eminiano (Jun) Reodica, a Filipino immigrant who controlled the firms, has not been seen in three weeks and apparently is in the Philippines. His wife transferred nearly $2 million to a bank in Manila just before she also left Los Angeles, reliable sources said. Money is missing from Grand accounts, say bank officials whose accountants are examining the firms’ books.
Sulmeyer said he has yet to determine the extent of illegal activities at the companies. “Any situation that includes fraud like this is difficult, especially when the people who know what went on are gone,” he said.
But if the bankruptcy judge orders the DMV to restore the dealerships’ licenses, Sulmeyer said, they should be able to become viable again.
DMV spokesman William Gengler said the agency will not take a position for or against the trustee’s request for a restraining order. “All we’re looking for is a plan that would protect the public interest, and we’d think that’s what the judge is looking for also.”
If the DMV is ordered to lift its suspension, that would eliminate the need for an administrative hearing now scheduled for Tuesday. If not, the hearing will be held to allow the dealerships to contest the suspension.
