Last-Minute Deal Keeps Slemons Imports Open : Bankruptcy: Unsecured creditors of the auto dealership will get at least $400,000 under the new plan.

A last-minute deal that provides at least $400,000 for unsecured creditors will keep bankrupt Jim Slemons Imports from being closed at least until an Oct. 21 bankruptcy court hearing decides the fate of the new plan, the attorney for the luxury auto dealer said Wednesday.

And that hearing could turn into a spirited auction, bankruptcy lawyer William Lobel said. Lobel said his firm has received calls from several parties indicating interest in buying Slemons Imports, one of the nation’s largest Mercedes-Benz dealerships.

The deal hashed out Wednesday by the key players in the Slemons bankruptcy still calls for Las Vegas-based Fletcher Jones Management Group to acquire the franchise and key assets of the Newport Beach dealership for $11.5 million in cash and notes.

Lobel said, however, that he will ask the court at the Oct. 21 hearing to entertain any other bids from parties Mercedes-Benz has approved for franchise ownership. The Jones group already has a Mercedes dealership in Las Vegas.

“There is nothing a debtor’s attorney likes more than a spirited auction,” Lobel said. “It almost always brings in more money than anyone thought possible. And this is a pretty unique property--a Mercedes-Benz dealership in Newport Beach.”

Although the agreement made Wednesday does not change the original terms of the Fletcher Jones group’s purchase offer, it does calls for the creation of a $400,000 cash fund to purchase a portion of the unsecured creditors’ $1.5 million in claims, Lobel said.

U.S. Bankruptcy Judge John Wilson rejected the original proposal Oct. 2 because it did not provide for payments to the unsecured creditors.

Lobel said Wednesday that the unsecured creditors could receive more than the $400,000 as other properties of car dealer James B. Slemons are liquidated to help pay off the approximately $14 million that Slemons Imports owes its secured creditor, Tokai Credit Corp.

Lobel said Tokai hopes to recover the $2.5 million that will no be repaid from proceeds of the Fletcher Jones sale by liquidating properties that include Slemons’ 83-foot motor yacht and his 10,000-square-foot home in Newport Beach.

Those properties are already on the market, Lobel said, and once Tokai Credit can settle its claims, any remaining money would go toward repaying unsecured creditors.

Lobel said that negotiations with the unsecured creditors committee broke down Tuesday and that Tokai said it would no longer extend credit to Slemons Imports as of Wednesday morning. That would have closed the dealership, Lobel said.

“I drove over there” Wednesday morning “to shut it down,” Lobel said. He arrived at about 10 a.m. to find a Tokai Credit vice president already on the scene, “and I suggested that we call the unsecured creditors one last time.”

Lobel said a conference call with members of the unsecured creditors committee resulted in a plan by about 5 p.m.