Whoever buys Bill Heard Enterprises Inc.s closed Chevrolet dealership in Scottsdale, Ariz., wont be selling Chevrolets or any other General Motors brand.
An attorney representing Heard Enterprises told an Alabama bankruptcy judge today that GM has notified the company it is not interested in the Scottsdale dealership, which moved into a new $12 million building in 2006.
They do not care for it to be a continued point of sale for their products, said Robert Rubin, an attorney with the Birmingham, Ala., law firm of Burr & Forman LLP.
A GM spokeswoman confirmed GM will not reopen that dealership, which closed Sept. 12. Heards 13 other stores closed Sept. 24, and the company filed for Chapter 11 protection Sept. 28.
Chase to liquidate assets
With GM passing on the Scottsdale dealership, U.S. Bankruptcy Judge Jack Caddell granted a motion from creditor JPMorgan Chase Bank that allows the bank to immediately liquidate its related assets at the dealership.
That includes all new- and used-vehicle inventory at the Scottsdale dealership that JPMorgan Chase financed through its floorplan agreement with Heard Enterprises, as well as parts. The rest of Heard Enterprises assets remain frozen while the case goes through bankruptcy proceedings.
According to court documents filed late Thursday, the value of JPMorgan Chases collateral at the Scottsdale dealership is between $8 million and $10 million. Clark Hammond, an attorney representing JPMorgan Chase, indicated that the bank would sell most of the vehicles to GM, with the rest going to a private party buyer.
GM has said it may not re-establish all the Heard stores. But GMs early market research had led it to plan to reopen the Scottsdale store, GM spokeswoman Susan Garontakos told Automotive News immediately after all the Heard stores closed.
That was still a viable point, Garontakos said at the time. Theres always the possibility that we might choose to consolidate that point with another dealership in that area, but right now we know that we need to keep the Chevrolet representation there.
But today, Garontakos said the Scottsdale store will not reopen.
Due to the market conditions today, GM has made a decision not to re-establish that dealership at this time, she said.
Bidding process approved
All of Heards dealerships, including the Scottsdale store, will be sold to the highest bidder through a process also approved today by the judge. After an unspecified due diligence period, Heard Enterprises will submit each final sale agreement to GM, which will have 10 days to determine whether the potential buyer is qualified. Assuming GM agrees, the judge will still have to sign off on each sale.
Rubin, Heards attorney, said five or six offers are under negotiation. We have a lot of interest, which is somewhat surprising in light of the economic realities of today.