Troy, Mich.-based Suburban Collection wants to purchase Jerome-Duncan Inc. in Sterling Heights, Mich., because of the dealership's track record for high-volume sales, David Butler a Suburban Collection general manager, said Wednesday.
"That market area where Jerome-Duncan Ford resides has been very successful, so we think it's an excellent point to have a Ford store," Butler said. "In years past, they have sold a lot of vehicles out of there. The market is a really good one."
Jerome-Duncan, one of Michigan's largest Ford dealers, filed for Chapter 11 protection in June in U.S. Bankruptcy Court in Detroit.
David Fischer, CEO of Suburban Collection, became the "stalking horse" bidder for Jerome-Duncan on Dec. 23 when he signed an asset purchase agreement that has been filed with the court.
On that document, Fischer is named as president of Suburban Ford of Sterling Heights L.L.C., an entity formed Nov. 28, according to state records.
Suburban Collection's offer includes $10 million for real estate, $4 million for "good will" and $800,000 for furniture. New 2006 models would be sold at dealer cost to Suburban Ford, minus rebates, credits and other allowances. New 2005 models would be sold at a 25 percent discount off the invoice price.
Four other dealerships affiliated with Jerome-Duncan -- Sterling Mazda in Sterling Heights and Woodhaven, Mich., Sterling Kia and Sterling Hyundai -- are not included in the purchase agreement, according to a notice of sale filed with the court.
Other bidders submitting a down payment by Friday will have an opportunity to match or top the Suburban Collection's purchase offer at a public auction at 10 a.m. Tuesday at Miller, Canfield, Paddock and Stone plc's Detroit office.
"I would anticipate that there are a lot of people that are interested in the entity," Butler said. "I'm not so sure that a large percentage of them are going to show up with a viable bid next Tuesday."
The Suburban Collection operates 26 auto dealerships in Michigan and Florida.