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Nov 13, 2008 10:57 pm US/Central
Car Dealer Denny Hecker Sues Chrysler Financial
MINNEAPOLIS (WCCO) ―
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Minnesota car dealership owner Denny Hecker has filed a lawsuit after Chrysler Financial Services, a long-time business partner, placed a hold on Hecker's credit lines.
CBS
A prominent Twin Cities car dealer is hundreds of millions of dollars in debt, according to his attorney, because his long time business partner has frozen his credit lines.
Minnesota car dealership owner Denny Hecker has filed a lawsuit after Chrysler Financial Services, a long-time business partner, placed a hold on Hecker's credit lines.
Hecker runs 18 dealerships in Minnesota and three in California. On Thursday, Hecker filed the federal lawsuit in Minneapolis saying that company's actions have seriously damaged his business and finances.
The lawsuit spells out the unraveling of a 20-year partnership that made millions for both Hecker and Chrysler. The suit said the relationship between Chrysler and Hecker began to deteriorate when an outside firm took a controlling interest in the auto giant earlier this year.
According to the lawsuit, Hecker has been unable to secure financing to replenish his inventory, cutting his floor plan financing and suspending floor plan credit lines.
Additionally, the lawsuit alleges that Chrysler Financial has "unjustified conduct, Hecker and his companies have been unable to meet supply contract obligations with national fleet customers including Hertz, Avis, Vanguard/Enterprise, the Mormon Church and others."
The lawsuit claims Hecker had been attempting to sell his car rental business Advantage, but that Chrysler Financial, "without justification or privilege," interfered by suspending Hecker's financing.
Chrysler Financial began financing Advantage's rental fleet in the late 1990s, according to the lawsuit.
On Nov. 7, Chrysler cut off all credit to Hecker including a line of credit that Hecker had personally guaranteed. The lawsuit says that Chrysler persuaded Hecker to make risky business deals including the purchase of Advantage Rent a Car and that Chrysler promised they would always stand behind Hecker.
Hecker's lawsuit also alleges that Chrysler Financial was slow to acknowledge the transfer of his business accounts to U.S. Bank, which caused some of his checks to bounce.
Hecker's lawsuit claims Chrysler Financial's actions have harmed his "credit, property and business, as well as his reputation and good will."
Hecker attorney Tim Thornton said Hecker got "deeper and deeper into debt and Chrysler pulled the rug out from under him."
Thornton said the current economic crisis made it the "perfect storm". Thornton said leisure travel dried up, credit dried up and automobile sales dried up -- all at the same time.
A spokesperson for Chrysler Finance said it would be inappropriate to comment on pending litigation.
Hecker is seeking in excess of $75,000 in damages as well as compensation for attorney's fees and expenses.
It is possible some of Hecker's companies may have to file for bankruptcy. So far there is no word of any layoffs for his 3,000 plus employees.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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