Eminiano (Jun) Reodica, the Glendora auto sales executive who disappeared in August when his business empire collapsed amid allegations of fraud, has written a letter insisting that his companies are solvent and that creditors seeking hundreds of millions of dollars will be repaid.
The letter from Reodica, the Filipino immigrant who built Grand Chevrolet in Glendora into the largest minority-owned business in Southern California, was delivered last month by an anonymous courier to Roy Gorre, editor of the Philippine American News in Los Angeles.
In the hand-written letter to Gorre, a longtime acquaintance, Reodica virtually ignored allegations of fraud made against him by creditors and the state Department of Motor Vehicles. Instead, he recounted how the hard work of Filipino immigrants enabled his companies to achieve spectacular success, and made a plaintive appeal to Gorre for “fair” treatment in the Philippine-American press. “Your friend is in trouble,” Reodica wrote. “Please don’t let me down.”
Reodica, 44, was last reported seen in Manila on Aug. 4, the day Grand Chevrolet filed for protection from creditors under Chapter 11 of U.S. bankruptcy laws. Three other Reodica-owned companies soon made similar filings.
The DMV and San Diego-based Imperial Savings & Loan have since alleged that Reodica’s companies committed fraud by exaggerating sales, getting customers to sign documents they did not understand and which resulted in extra charges, and financing thousands of car sales through more than one lender at the same time.
Officials of Imperial Savings said that of the $172 million worth of car loans they bought from Reodica, $20 million may be uncollectable. Reodica is currently the subject of a bank fraud investigation by the U.S. attorney’s office.
In his letter, dated Aug. 20, Reodica alleges that Imperial Savings “forced” Grand Chevrolet and Grand Motors--his statewide network of storefront auto brokerage businesses--into filing for Chapter 11 protection by withholding $4.2 million it owed the companies. His companies went to Bankruptcy Court after learning that Imperial planned to ask a judge to place them in receivership, Reodica said.
An Imperial Savings vice president, Rocco J. Fabiano, on Tuesday called “absurd” Reodica’s allegation that the firm was responsible for Grand’s problems. And Victor Vilaplana, an attorney for Imperial, said officials of the firm finally sought to place Reodica’s companies in receivership only “when they learned there was a massive scheme to defraud lenders.”
In his letter, Reodica said his companies have assets totaling $270.6 million, against liabilities of $231.8 million. “There are sufficient assets to generate the cash to service all our debts,” he wrote.
But Irving Sulmeyer, the trustee appointed by the court to preside over the Grand dealerships, said he has been unable to uncover such assets.
“Where did the money go?” Sulmeyer asked. “There may be some real estate that may have equity, (but) I doubt you’ll see any of the money. . . . I would hope Mr. Reodica would come back and, if he believes what’s in this letter, help us sort these things out. I would very much like him to explain to me what these assets are, where they are and in whose name.”
In the letter, Reodica made only one mention of the allegations against him, noting that “legal issues that may come up relate to what may be presented as fraud.”
Sulmeyer said the letter’s discussion of the fraud issue was grossly inadequate.
“At that point, Mr. Reodica is silent,” the trustee said. “The multiple contracts, the forgeries, the multiple selling of vehicles--on these matters, he is silent.”
Gorre, who is president of the Filipino American Press Club, said Reodica directed his message to the Southern California Filipino community, which once viewed him as an entrepreneurial hero but now feels betrayed.
Gorre said he showed the letter to four Reodica associates and they are convinced that it is authentic. But he expressed doubt that the letter did anything to improve Reodica’s tarnished reputation.
“It might elicit pity, but it won’t turn things around in terms of actual support for him,” Gorre said. “Assuming we take his line that (the problem) is manageable, the question comes up, ‘If it’s so manageable, why aren’t you here?’ . . . His absence is the thing that makes it hollow.”