A bankruptcy judge has accepted a $20 million bid by Jean Durdin, owner of Tomball’s Parkway Chevrolet, for the Bill Heard Chevrolet dealership in Sugar Land.
The deal came as the result of a Sept. 29 bankruptcy filing by Bill Heard Enterprises, once one of the nation’s largest Chevy dealerships, with annual sales of more than $2 billion a year. Now seeking protection under Chapter 11 of the U.S. Bankruptcy Code, Heard Enterprises includes 14 dealerships, among them Bill Heard Sugar Land and Landmark Chevrolet in north Houston.
In winning the Sugar Land dealership – said to be the largest Chevrolet dealership in greater Houston, Durdin topped an earlier bid by Houston auto dealer Mac Haik by more than $7.7 million, according to Automotive News. The bid doesn’t include the Sugar Land dealership’s vehicle or parts inventory.
Durdin’s bid was submitted to U.S. Bankruptcy Court in Alabama on Nov. 10, but was not approved by Judge Jack Caddell until recently. Fred Caruso of Chicago-based Development Specialists Inc., who is serving as Bill Heard’s financial advisory in the bankruptcy case, said Tuesday the legal closing of the deal hasn’t occurred but should be completed over the next several weeks. Durdin didn’t return a phone call for comment.
Callers to the Sugar Land dealership still are greeted with a message welcoming them to Bill Heard Sugar Land, and adding “you’ve reached our office after hours.”
Sugar Land is just one of several major Heard dealerships being auctioned off as part of the bankruptcy. The Atlanta Journal-Constitution reported Heard Enterprises owes creditors between $500 million and $1 billion.
According to Automotive News, more than half of sales at the company’s dealerships were made to subprime borrowers. The publication quoted a former manager at Heard’s Las Vegas dealership as saying that in its last year, 20% to 30% of all financing deals ended up falling through.
And the Sugar Land dealership generated more Better Business Bureau complaints over the past year than any other dealership in the greater Houston area, Automotive News reported.
A check with the Houston BBB showed Bill Heard Sugar Land generated 142 complaints over the past 36 months. Of these, 34 involved advertising issues, 26 involved refund or exchange issues, 24 involved selling practices and 17 involved service issues.
In Sugar Land and at Heard’s other dealerships across the country, the bankruptcy has caused widespread consternation and disruption of the lives of some of the car seller’s customers. Documents in the bankruptcy case indicate that more consternation is sure to follow.
A reporter with the online automotive publication Jalopnik, who visited the Bill Heard Sugar Land dealership the day after Heard filed for bankruptcy, spoke with several people trying to complete sales transactions they’d begun with sales representatives for cars and trucks. One man had driven from Corpus Christi with his son and a check, expecting to buy a pickup truck for the boy. Instead, he met two security guards who had been hired by General Motors to make sure that no vehicles left the bankrupt dealership’s parking lot.
In an attempt to unsnarl the mess, Judge Caddell signed an order last month granting authority to resolve some of the hundreds of car and truck transactions left in limbo by Heard’s bankruptcy filing.
In some cases, liens of vehicles traded in by customers of dealerships in the Houston area and elsewhere have not yet been paid off.
In other cases, customers are driving around in cars or trucks for which the sales transactions hadn’t been completed. Such “unsold vehicles do not belong to the customer, but rather” are part of the bankruptcy estate,” the court order states.
The judge granted Heard’s creditors the authority to “retrieve” such unsold vehicles, either with the consent of the customers or via “repossession or other legal means.”
