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Car Dealerships Shut Down in a Conflict May Reopen
A car dealer in Industry who said he intends to purchase Duarte Nissan Inc. claims that it may reopen under new management after closing its three dealerships last month amid a financial dispute.
The owner of Puente Hills Nissan, Harlan Gittin, announced that he will meet with Duarte Nissan Inc. representatives on Monday to finalize the terms of his acquisition of the Isuzu, Nissan, and Suzuki dealerships in the Foothill (210) Freeway Autoplex.
Gittin predicted that “we’ll pretty much hammer this stuff out.” If we aren’t operational by the end of the month, I’d be astonished.
According to Bruce Low, general manager of Duarte Nissan Inc., negotiations with Gittin and other prospective buyers have been going on between him and his father, Robert Low, president of the business. He declined to add more commentary. On the premises on Tuesday, an electronic business sign read “Opening Soon.”
After filing under Chapter 11 of the U.S. Bankruptcy Code for a debt restructuring and protection from creditors, the Isuzu and Nissan dealerships filed for closure of their operations.
About 20 staff were laid off, and some customers’ complaints went unanswered.
No sales decline was the cause of the bankruptcy filing. Since the companies relocated to Duarte, automobile sales have actually increased. According to Low, they sold 5,000 Isuzu and Nissan cars last year for a combined $60 million, up from 2,500 units in 1988 when the companies were based in Arcadia.
According to Duarte City Manager Jesse Duff, the dealerships brought in $300,000 of the city’s $1.65 million in sales tax income last year and were projected to bring in $250,000 this fiscal year.
The dealerships’ principal creditor, Tokai Credit Corp., based in Pasadena, however, caused a string of financial issues for them.
Tokai sued the Duarte dealerships two months after the bankruptcy was filed, claiming that the Lows had “stolen” more than $8 million in inventory by keeping the money from auto sales instead of giving it to Tokai, which had bought inventory for the three dealerships.
Tokai further asserted that the owners turned down potential buyers by setting unreasonable rent demands and failed to make good faith efforts to sell the companies after the bankruptcy filing.
Furthermore, according to Tokai representatives, the Lows owed them $666,000 as per the post-bankruptcy arrangement but chose to utilize the funds to settle sales tax bills made before to filing for bankruptcy.
A federal bankruptcy judge ordered the dealerships to transfer their funds to a trust account maintained jointly by Duarte Nissan Inc. and Tokai. Tokai’s lawsuit, which sought to recover all of the remaining cash collateral from Duarte Nissan Inc., was settled.
The State Board of Equalization was mandated by the judge to give Tokai back the $666,000 and deposit it into the account as well.
Officials from Tokai declined to say if they intended to pursue more legal action.
Every accusation has been refuted by Bruce Low. He asserts that Tokai breached its own provisions of the post-bankruptcy agreement, but he will not present any evidence to support this assertion.
The three dealerships, which are situated near the intersection of Central Avenue and Buena Vista Street, had 300 new and used cars removed from them on Tuesday by Tokai. According to Conrad Noriega, senior vice president of Tokai, the cars were put in storage and would eventually be sold by the credit organization.