Bankrupt Toyota of Simi Valley Sues Parent Company

The owners of the bankrupt Toyota of Simi Valley car dealership have filed a lawsuit against their parent company alleging fraud and deceit.

Sam and Thomas Barooni, the dealership’s owners, said the actions taken by the Toyota Motor Credit Corp.--Toyota’s U.S. financing arm--have devastated their business as well as their name.

“We’ve been shattered,” Sam Barooni said. “This was our lifelong dream. We were providing a real good service . . . 110 jobs . . . and we just think we were unfairly treated.”

For a short time in early February, the parent company forced the dealership to halt sales of all cars and car parts after alleging that the Simi Valley lot was selling vehicles below cost.

Two weeks later, however, the dealers sought bankruptcy protection, which allowed them to operate their business under the oversight of the bankruptcy court.

Although the dealership is open for business--selling new cars and used cars and servicing other vehicles--it is also about to go through a bankruptcy reorganization. The dealership sought protection from its creditors under Chapter 11, after the Toyota Motor Credit Corp. tried to collect on a $3.6-million debt.

This week, the Baroonis filed a lawsuit in Los Angeles Superior Court alleging that Toyota’s actions--which they say amounted to fraud, deceit, defamation and a violation of the California Fair Dealership Law--led to their dealership’s bankruptcy.

“Certainly there were actions taken by the [Toyota Motor Credit Corp.] that resulted in damage to my clients,” said Gary Barr, an attorney representing the Baroonis.

Officials from Toyota Motor Credit Corp. said they had not seen the court filing.

“Our lawyers apparently saw an early draft,” said Joe Tetherow, a Toyota spokesman. “And they determined that there was no basis in fact for what we saw.”

The 29-page complaint filed by the Baroonis on Thursday alleges that officials with the Toyota Motor Credit Corp. lied to the dealers and broke agreements. The suit also claims that company officials defamed the Baroonis by implying that they were “operating unethically and/or illegally.”

The suit, which seeks unspecified damages, is not set for a status conference until next February, Barr said.

Meanwhile, the bankruptcy reorganization is proceeding with several hearings scheduled in April, said Gary Plotkin, an attorney representing the dealership in the bankruptcy.

Plotkin said the business has already received several buyout offers.