Seven terminated Suzuki dealers settle protest with bankruptcy trust

Publish Date: 
May 9, 2013
By Holly J. Wagner

SANTA ANA, Calif. – Seven former Suzuki dealers who protested their terminations in U.S. Bankruptcy Court have reached a settlement with the trust that manages the remaining assets of defunct American Suzuki Motor Corp. (ASMC).

Terms of the settlement were not disclosed, but an attorney for the dealers confirmed that the dealers have settled with the PE Trust, which manages the remaining assets of ASMC in the bankruptcy.

The dealers’ attorneys had argued that ASMC, which notified 98 dealers with letters dated March 15 that they would be terminated under the bankruptcy, did not provide them enough time to protest before the liquidation plan was approved the same day. The dealers asked to have their franchises assigned to the company that emerged from the bankruptcy, Suzuki Motor of America Inc. (SMAI).

Attorneys for SMAI argued that the dealers were too late and should have raised a protest with the court when their names did not appear on a list of contracts that would continue when ASMC sold them to what would become SMAI under an asset purchase agreement in the bankruptcy. They contended that since SMAI did not yet exist at the time of the ASMC bankruptcy, it could not be forced to assume the dealers’ contracts. The dealers’ complaint, they said, was with the trust.

Attorneys for the PE Trust – the same attorneys that filed the ASMC bankruptcy – also argued that  the dealers waited too long to protest, Attorneys said the trust could not reinstate their franchises because ASMC dissolved when the liquidation plan was approved.

The dealers contesting termination were B&B Cycle & Marine Inc. (Bridgeton, N.J.), Salinas Motorcycle Center (Salinas, Calif.), Berkeley Power Sports (Monck’s Corner, S.C.), Chesterfield Valley Power Sports (Chesterfield, Mo.), Derry Cycle (Derry, N.H.), All-Pro Motorsports Inc. (Weirton, W.V.) and Flat Out Motorcycle Group (Indianapolis, Ind.). Derry Cycle, All-Pro Motorsports and Flat Out Motorcycle Group still had Suzuki logos on their websites at press time.