Bankruptcy Court Rules on Glendora Firms : Judge Orders Licenses Restored to Car Dealers
A federal bankruptcy judge Monday ordered the Department of Motor Vehicles to restore the sales licenses of two Glendora car dealerships, despite arguments by DMV lawyers that permitting the firms to survive would be a “travesty.”
On Aug. 5, the DMV had suspended the licenses to sell cars of Grand Chevrolet and Grand Motors, both part of the Glendora-based Grand group of companies, for illegal business practices and failure to meet financial obligations. The same week, the dealerships and two affiliated finance companies filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.
During meetings over the past two weeks with company lawyers, DMV officials had refused to return the dealerships’ licenses until federal bankruptcy trustee Irving Sulmeyer replaced the top management of both companies. DMV investigations showed that “managers at virtually every level of the operation” were responsible for defrauding clients, DMV chief counsel Alan Mateer said at the hearing Monday.
But U.S. Bankruptcy Judge James J. Dooley said that since Sulmeyer has been put in charge of the businesses, he should have a chance to operate them with employees of his own choosing in an attempt to begin repaying creditors.
Eminiano (Jun) Reodica, the Filipino immigrant who controlled the Grand companies before they filed for bankruptcy protection, has apparently left the country.
After the decision, Sulmeyer said he would try to work out an agreement with some of the Grand companies’ major creditors, including General Motors Acceptance Corp., which owns most of the cars in the dealerships’ inventory. If that is successful, he said, the businesses could open in about 10 days. “At least we have a chance now,” he said. “That’s all we wanted.”
The courtroom was packed with company employees and investors who occasionally cheered Sulmeyer and his lawyers. Most in the crowd seemed visibly relieved when the judge announced his decision.
