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Friday, November 20, 2009
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Toyota works on car deal
Senior Reporter BAXTER - Bankruptcy court rulings for Denny Hecker put a wrench in a deal to sell the Toyota dealership in Baxter.
But a restructured purchase agreement could breathe new life into the closed dealership on Highway 371.
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Denny Hecker's name, once prominent on the Toyota/Scion dealership along Highway 371 in Baxter, was removed from the building. Negotiations continue for a sale between Toyota and Walser Automotive Group from the Twin Cities. Brainerd Dispatch/Renee Richardson
» Purchase reprints of this photo.
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In September, Twin Cities-based Walser Automotive Group had a purchase plan in place to buy Hecker's last remaining dealership following the auto magnate's meltdown. But U.S. Bankruptcy Judge Robert Kressel rejected the agreement.
Kressel questioned a $750,000 consulting fee Walser had agreed to pay Hecker and the late involvement of a bankruptcy trustee.
Doug Sprinthall, Walser director of new vehicle operations, said the automotive group is guardedly optimistic there is a way to restructure the deal and gain court approval. Sprinthall said he expects to know more just before Thanksgiving.
"It's been a long process and things look better than they did a couple weeks ago," he said Thursday.
If it does go through, the purchase agreement is expected to cover the property, building and the inventory of new vehicles, Sprinthall said. The new enterprise will be called Lake Country Toyota.
With all the back and forth, Sprinthall said he worried about the employees who are in limbo, waiting to see what happens. Walser was already in the area interviewing former Hecker employees. Walser reported it planned to hire about 25 sales and service staff members to start.
"I really feel bad for them and it's tough especially in this economy," Sprinthall said.
Hecker previously had 26 dealerships. He filed for personal bankruptcy protection in June, saying he owed up to $1 billion to up to 1,000 creditors.
This fall, Toyota Motor Sales USA Inc. had planned to sell cars, parts and other non-land assets to Paul Walser for about $3 million, the Star Tribune reported. Toyota Motor Sales USA's office in Detroit did not return a call Thursday.
The Star Tribune reported a chief creditor, Chrysler Financial, objected to the sale to Walser, saying it was entitled to more money. Chrysler Financial reports it is owed $466 million. The Star Tribune reported the financial breakdown from the $750,000 consulting fee would have given about $300,000 to the trustees to pay creditors, $40,000 to pay back taxes and $60,000 to pay for Hecker's new attorney.
Walser's majority shareholders plan to run the Baxter dealership in partnership with Bob Ebert of Maple Grove, who is in charge of Walser's service operations in its 10 stores.
Wednesday, in a bankruptcy court update, the Associated Press reported Hecker was found in contempt of court for failing to produce bank records and other documents related to his case. Hecker was ordered to pay $660 in attorney's fees and produce the documents by noon Monday.
RENEE RICHARDSON may be reached at renee.richardson@brainerddispatch.com or 855-5852.
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