According to court documents filed late Friday, Serra Automotive has reached an agreement with Heard Enterprises to buy all “new and used vehicles, demonstrators, parts, fixed assets such as furniture and computer equipment, miscellaneous inventories, goodwill and intangibles” associated with the two Las Vegas stores.
But the bids are just that -- bids. Heard filed for Chapter 11 bankruptcy last month in Alabama with the intention of liquidating its business in 45 days.
Per the process approved by U.S. Bankruptcy Judge Jack Caddell, if another potential buyer steps forward with a higher offer before Nov. 11, an auction for the stores will be held. Caddell also must sign off on any sale of Heard Enterprises’ 14 dealerships in seven states.
Serra Automotive has some conditions of its own, most notably that the purchase of either Las Vegas dealership is conditional on it also acquiring the other and that General Motors grant franchises to both.
Joe Serra, president of Serra Automotive, said he tried to buy both the Las Vegas dealerships several years ago from a previous owner, but was outbid by Heard Enterprises owner William T. Heard Jr.
“Vegas is a market I’ve tried to enter for many years now and just couldn’t find the right opportunity. And the Chevy brand is one I have a lot of confidence in. It’s the right brand in what I think is going to be a solid market for years to come. That combination got my interest,” Serra told Automotive News.
Serra Automotive, of Grand Blanc, Mich., ranks No. 19 on the Automotive News list of top 125 dealership groups, with new-vehicle retail sales of 22,678 units in 2007. According to its Web site, it operates 21 dealerships representing 33 franchises, including the Chevrolet brand.
In addition to the Grand Blanc store, Joe Serra said Serra Automotive is a partner in six dealerships that sell the Chevy brand: two in Colorado Springs, Col.; Pasadena, Calif.; Memphis, Tenn.; Jackson, Tenn.; and Miamisburg, Ohio, outside Dayton.
“We didn’t even look at the others,” Serra said of Heard Enterprises’ other dealerships. “Our focus was strictly on the Vegas stores.”
Fred Caruso, vice president of the Chicago turnaround consulting firm Development Specialists Inc., in charge of selling the Heard dealerships, said the bids from Serra Automotive are the first of several more to come.
“Two down; 12 to go,” Caruso said of the remaining dozen dealerships in Georgia, Arizona, Tennessee, Alabama, Texas and Florida. “Hopefully you’ll see a lot more action early next week.”