Gilbert Auto Group files for Chapter 11
Gilbert Auto Group filed for Chapter 11 protection in U.S. District Court Wednesday. Owner Mark Gilbert said operations at his Northwest dealerships, including Gilbert Nissan in Moses Lake, will continue as normal.
MOSES LAKE - Despite being named in several lawsuits, Gilbert Auto Nissan and other Northwest Gilbert dealerships will remain open, according to owner Mark Gilbert.
Gilbert Auto Group filed for Chapter 11 protection in U.S. District Court Wednesday. The filing covers Gilbert's dealerships in Moses Lake, Walla Walla, College Place, Moscow, Idaho and Pendleton, Ore.
As a result of the filing, no dealerships will close, nor will any employees lose their jobs, said Gilbert in a statement earlier this week.
"All Gilbert dealerships will remain open and ready to do business," he said.
Chapter 11 of the Bankruptcy Code provides a business or individual protection from creditors' lawsuits while they restructure their finances. A Chapter 11 debtor will typically propose a plan of reorganization to keep its business alive and pay creditors over time, according to the Bankruptcy Code.
Gilbert said the reorganization process is expected to be completed within 90 to 120 days.
Nissan Motor Acceptance Corporation filed a lawsuit in Grant County Superior Court last month, suing Gilbert Nissan over claims it breached contract agreements.
The breach resulted in about $3.4 million of unpaid loan balances, according to records.
The Nissan lending company also reportedly determined Gilbert Nissan had not paid for 69 cars as of Jan. 18 and still owed the company for past due wholesale charges, mortgage payments and sign lease payments.
The lawsuit called for the repayment of about $3.4 million in unpaid loan balances, $44,000 in sign leasing fees and about $1.7 million it owes in mortgage fees, according to records.
Earlier this month, Gilbert Nissan was named in a state Attorney General's complaint, alleging the dealership failed to pay off buyer's trade-in vehicles as required by law.
The Walla Walla County Superior Court granted the Attorney General's motion for a preliminary injunction, which ordered Gilbert Nissan and several other Gilbert dealerships to comply with dealer and consumer protection laws requiring prompt payoff on customer's trade-in vehicles.
The Attorney General's office also wanted the court to assess a civil penalty of $2,000 for each violation outlined in the complaint as well as make necessary orders to provide for consumer restitution.
According to records, American Honda Finance Corporation also filed a lawsuit against Gilbert Auto Honda in College Place last month.
In its lawsuit, the Honda financing company claims the College Place dealership sold a number of vehicles financed by American Honda without paying for them.
As of January, Gilbert Honda allegedly owed American Honda about $107,585 for vehicles sold out of trust.
As of Feb. 7, Gilbert Honda had sold 27 vehicles without paying American Honda Finance for them, according to the complaint. The Honda financing company declared Gilbert Honda in default of its contracts with American Honda Feb. 8.
As of last month, Gilbert Honda owed American Honda Finance more than $5 million in credit extended to the dealership, according to the complaint.
In addition, Gilbert of Walla Walla also allegedly sold vehicles out of trust without paying its lender for the vehicle and without transferring the title to vehicles in accordance with the law, according to records.
However, according to Gilbert's spokesperson Jillian Henze, Gilbert Auto is protected from those lawsuits under the Chapter 11 filing. No further action will be taken, she said, and the lawsuits won't move forward.
"This (Chapter 11) supersedes those lawsuits," she said Thursday.