MANTECA — A prolonged divorce dispute has put Manteca Auto Plaza near the brink of closure.
The 11-year-old GMC and Buick dealership had its funding, called "flooring," pulled and all its new vehicles removed from the lot Wednesday. The move came after company's corporate accounts were frozen as part of ongoing legal proceedings stemming from owner Mike Peters' 2005 divorce.
All 150 new vehicles, valued at about $4 million, were taken back by Ally Bank. Peters said the Manteca Auto Plaza, which has 50 employees, remains open for business. About 20 used cars are left on its lot and the parts, service and body shop are still operating.
"This is the culmination of a series of events that have nothing to do with the dealership, but have caused the dealership to teeter on the brink," Peters said Friday. "I don't know if I'm going to be able to survive. But we'll try. There's a better than 50 percent chance we aren't going to make it."
Peters said he has an appointment to meet with the Contra Costa County Family Court judge Monday to discuss the decision to allow his corporate account to be frozen. He also is working to find alternative financing. But, he said, banks have told him it will take three to four weeks to secure the $4 million to $5 million needed to return new cars to the lot.
"I have to get a flooring line in place to get back in the operation of selling cars," Peters said. "I'm talking with lenders, but it's a huge task."
The Contra Costa judge appointed the receiver firm of Gary Negherbon & Associates to monitor Peters' finances in regards to his divorce settlement payments.
The firm, he said, surprised him last week by asking Wells Fargo to freeze Manteca Auto Plaza's corporate checking account, which had a balance of about $500,000. Without access to that money, the company was unable to make required, successive daily payments to Ally Bank of $66,000 and $83,000 on July 19 and July 20. The bank then suspended the dealership's new car credit line.
Peters said his Wells Fargo business account remains frozen.
"This has has destroyed a very profitable company and potentially put 50 people out of work," he said. "This has been probably the most difficult week of my professional life."
Bee staff writer Marijke Rowland can be reached at email@example.com or (209) 578-2284.