Team Chevrolet in Smyrna, the successor to one of Middle Tennessee's oldest General Motors dealerships, has filed for Chapter 11 bankruptcy protection as it prepares to be taken over by a new group of investors, the company's general manager said Friday.
In the meantime, the business remains open and most of the employees remain on the job, said Chuck Hanes, a 24-year veteran Middle Tennessee auto executive who took over management of Team Chevrolet about a year ago.
"We're involved in a buy-sell situation and intend to continue in business in Smyrna for a long time," Hanes said. "We have asked (the U.S. Bankruptcy Court) to expedite the buyout so we can continue moving the business forward."
Joseph P. Tortorich, who has owned Team Chevrolet for the past 11 years, was not available for comment Friday. He will not be involved in the reorganized company, Hanes said.
U.S. auto dealer failures and bankruptcy filings spiked to record highs during the past year as the recession and a resulting credit crunch pushed auto sales to their lowest levels in more than 25 years.
Team Chevrolet LLC's biggest creditor is General Motors Acceptance Corp., which holds a lien estimated at $2.5 million on the dealership's inventory of new and used cars. Total debts of $4.7 million were reported, and assets were listed at
$3.9 million in court records.
Besides GMAC, other major creditors include the Tennessee Department of Revenue, which is owed about $350,000 in unpaid sales taxes dating to July 1, 2008; and Regions Bank, which is owed $112,000, court records say.
Hanes said GMAC would continue to finance the dealership's inventory under the new ownership.
"We have a great relationship with GMAC and look forward to many years of continued business with them," he said.
Business has deep rootsThe dealership has been in the same location for almost 60 years, at 169 S. Lowry St., and previously was known as Sam Ridley Chevrolet. Ridley, who died in 2003 at age 83, was mayor of Smyrna for 40 years until he resigned in 1987.
The Ridley family still owns Team Chevrolet's building, and the dealership's potential new owners are working with the family to continue in business at that location, Hanes said.
Meanwhile, on the national level, U.S. auto industry lobbyists and lawmakers are discussing a proposal to give consumers as much as $4,500 in government vouchers to replace older cars with more fuel-efficient vehicles.
The so-called cash-for-clunkers proposal may not win enough support to be added to $819 billion stimulus legislation that passed the U.S. House and will come before the Senate, Alan Reuther, legislative director of the United Auto Workers union, said in an interview Friday.
Lawmakers have joined auto industry executives in trying to devise ways to boost auto sales and promote fuel efficiency to help the environment.
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