SPECULATION/RUMOR - Dealer goes Chapter 11

Do you have documentation stating that you purchased the car being built showing your old car as a trade? Do they have the title to your car or is there a payoff?

 

What State are you in?

What State is the dealer in?

 

be careful. don't do anything rash. and only take advice from someone knowledgable and qualified to answer.

 

Did you provide the dealer with the title to the car?

 

In that case you don't have recourse for return of the car, do you?

 

You'd probably be SOL and have to line up like everyone else at the BK court.

 

You'd have to get in line in bankruptcy court. Your best bet is to get ahold of someone credible at the dealership, document the conversation and copy your attorney on the correspondence.

The good news is you'd be first in line to get your money back, since there is a UCC lien on the asset.

I would not worry too much about it, unless you have reason to believe that the dealership is facing insolvency.

Your $90K won't make or break a Ferrari dealership.

 

Since you are concerned about it, get a good attorney to give you advice. You have $90k invested...worth paying some insurance for peace of mind...right?

 

most likely you'll get screwed, the bank that funds the dealership will get all the money first. If there is anything left over you'll have to provide documentation to the court to get anything back and it's a long and painful process. 99% of the time there will not be enought assets to cover the bank loan...

 

328 man, sorry this happened. unfortunately this will be a common thing going forward. What everyone has mentioned above is right. Basically you have a deposit on a NEW car. As long as you get to buy the new car less the deposit its all that matters . In this case I would advice you to contact Ferrari of NA. Ask to speak to the president and explain your situation. Good luck.

 

The Lambo dealer here went bust and was recently shut down by the Feds. Everyone passed it off as Lambo owner's are more impulsive, typically come into easy money and spontaneously buy one hence it'd be easy for a dealer to run out of steam quick with customers like that. OTOH the F buyer was thought to be more calculating on their purchase(lifelong dream etc.) of an F-car so it'd be less likely to happen to an F-dealer. There's always a first somewhere in the US though.

 

which asset? the trade-in that has already been sold or the ordered but undelivered car? I'd think neither.

 

They didn't lock the doors, they filed to reorganize which means they want to stay in business. You will most probably be OK but I agree with the advice to talk to them and to Ferrari NA. No one wants headlines.

 

If the dealer you ware working with ware closed down by there lenders (in this case FNA?) it should not effect your order, in fact the banks would want it delivered to you, to get it off the books. The car however might be delivered through a another dealer..IF that ware to happen.

The dealer that gave you (LoCB and LoOC) the fear though was not in Chapter 11 reorg but rather ware a forced closed down, by there lenders, and inspectors...other then Exotic Cars Ceazer Palace and LoOC, I cant think of any exotic dealers that have closed recently, note for fenzoman though..I know of at least 10 that ware close a few weeks back but at least a few have since come around ...

But I am confussed..you are not saying or implying the Ferrari dealer you bought your car from is closing or have closed or has filed chapter 11 protection right?

 

Is your question rhetoric of the whole situation?

I do not understand if your concern is for the deposit you gave the dealer or for the $90K? And realistically I do not understand the whole situation.

Define it all a bit and I may be able to shed some info

 

If it's the NY dealer I know, I've been told chap 11.

 

Why risk $90k over taxes? What are taxes in your state, perhaps $10k on that amount?

Ask your dealer to cut you a check for $90k and just pay the full taxes later IF you get to purchase your car. So you lose $10k in higher sales taxes...beats not being able to sleep at night being worried about getting screwed over for $90k.

Well, you asked for thoughts. That's mine. Make deals that let you sleep at night.

 

I don't know all the state's laws but I have done transactions like that before, and the dealer was NOT required to keep the money in order for the trade-in to apply as a trade. They may just be making that up to get float.

You may want to check very carefully your state's tax laws because I have never heard of a case where a dealer has to keep the money - the deal just has to be completed within 90 days on the new car or the trade expires.

 

As none of us are dealing in chump change, always bring your attorney(s) in first. I have found it far easier over the years to have a contract drawn up first with clauses covering such matters as your death, insolvency, damage to vehicle, dealers insolvency, delays in delivery etc. It saves a great deal of sleep and frustration than when trying to bring them into the picture later. Remember you are not trying to beat the other party over the head with a stick, just dealing with the realities of business.

 

IF there is a bi-lateral contract with a seventeen digit vin, there is a UCC lien which the manufacturer would have a fiduciary responsibility to attempt to uphold.

This is only relevant if Ferrari North America participates in the dealer's flooring line of credit, or in any way subsidize the payment of debt. I can tell you with a good deal of certainty that almost all dealerships use the manufacturing holdback and flooring plan. Banks get $ first. Then employees. Then debtors. Then customers. Then shareholders. I'm sure some witty BK lawyer will correct my gross generalization. But in fact you are dealing with TWO separate transactions- one is secured, one is unfortunately NOT.

The trade-in money is not secured by anything except the good word of the dealership and perhaps a consignment agreement- and as many have noted that's a difficult and long process. This is all an exercise, anyway since nothing would indicate there is in fact a problem.