Dealer in toronto goes belly up, literally stealing $ 76K the day before.
Wannabe C8 owner got his pocket picked too....
I had put down $25,000 on my dream car, a new 2020 Corvette,” Terry Mangal told CTV News Toronto. “Now I have no idea what is happening with my money or my car.”
Customers, who had already made purchases and were waiting to take home their vehicles, were in shock Wednesday after learning that the popular General Motors dealership in North York had shuttered its doors.
We were just talking about this at work, OMVIC's Compensation Fund should help a lot of people out if they fall within the criteria.
A painful hassle to say the least.
I'm sure he got away with a lot more than the stated 9.2 M he owed to RBC.
We were just talking about this at work, OMVIC's Compensation Fund should help a lot of people out if they fall within the criteria.
A painful hassle to say the least.
I'm sure he got away with a lot more than the stated 9.2 M he owed to RBC.
45,000 cap isnt great though. At least one person is out 77,000.
It sounds like it has been shady for quite a while and they decided to take the public for all they were worth while they were circling the drain. I would be entirely fine with the last five years of money going out to the owners to be eligible for a clawback. If that puts them into personal bankruptcy, too bad.
You own a company. Your company borrows $9.2M from the bank.
You get your company to pay you a $9.2M salary.
Your company declares bankruptcy.
Yeah, I know some of the debt should be secured by some kind of collateral, so the bank seizes those assets. But, you as an owner are personally shielded from liability and walk away with $9.2M (minus income tax) without further repercussions?
Dealer in toronto goes belly up, literally stealing $ 76K the day before.
Wannabe C8 owner got his pocket picked too....
I had put down $25,000 on my dream car, a new 2020 Corvette,” Terry Mangal told CTV News Toronto. “Now I have no idea what is happening with my money or my car.”
Customers, who had already made purchases and were waiting to take home their vehicles, were in shock Wednesday after learning that the popular General Motors dealership in North York had shuttered its doors.
GM Canada should have seen this coming. They have auditors and connections to vendors and get regular feedback. Since this looks bad for GM, they will likely step in reluctantly for who ever squawks the loudest for products that were purchases or had down payments and have them placed through another dealer.
It’s ugly and a mess and a hassle for customers but, generally speaking it will get sorted out.
My client had a couple of furniture stores franchises go into receivership. There were signs of trouble well in advance as vendors reported concerns as well as other franchises that shared shipping of product and looking for payment. And the company I work for had customers billed for product that wasn’t received. Initially, you think it’s ok or a misunderstanding but once you start talking to HQ, you find out more.
I’m confident GM Canada knew there was trouble. Just how bad, it’s anyone’s guess.
The legal system (bankruptcy court) can "lift the corporate veil" on certain transactions - and reverse them, i.e. go after whoever benefited from them - if it becomes apparent that actions were being taken with the intent of defrauding shareholders. That would almost certainly happen if a situation like that described above ended up in bankruptcy court. There are some time limits and other limits on what sorts of transactions can be reversed in this manner ... we've all seen cases of companies that were quite obviously being run into the ground, with owners paying themselves over a long period of time and strategically reorganising the company to maximize their own benefits.
You own a company. Your company borrows $9.2M from the bank.
You get your company to pay you a $9.2M salary.
Your company declares bankruptcy.
Yeah, I know some of the debt should be secured by some kind of collateral, so the bank seizes those assets. But, you as an owner are personally shielded from liability and walk away with $9.2M (minus income tax) without further repercussions?
I would be surprised if the bank didn't make the owner sign personally against the loan although it would be in the corporations name. Mind you Dean Myers was in business forever so maybe not in this situation but generally I believe there would be a personal guarantee.
Wouldn't be surprised if another company buys the franchise and takes on the debts and liabilities. No idea how the technicalities work out, but it's happened before.
Northtown Ford at Yonge Steeles did the same 10+ years ago, just shut down overnight locking everyone out. Reopened after a few months as Yonge Steeles Ford. Now they're one of the highest volume Ford stores out there. For those curious, they have a neon green Mercedes G Wagon 4x4 monster truck for sale.
You own a company. Your company borrows $9.2M from the bank.
You get your company to pay you a $9.2M salary.
Your company declares bankruptcy.
Yeah, I know some of the debt should be secured by some kind of collateral, so the bank seizes those assets. But, you as an owner are personally shielded from liability and walk away with $9.2M (minus income tax) without further repercussions?
It’s slow but has a sweet exhaust note. Gets a lot of attention by strangers that tell you about the one they had. It was just like the one I have etc.
A Brit Car Club member has a 2003 MX5 and a few other toys. (Camaro convertible, mustang convertible etc)
We play the game of when it’s time to cull the herd, I’d be interested in the MX5. He’s let me drive it a few times and it’s wonderful. 6 spd manual, British racing green with tan interior.
No greasing the suspension, easy top up and down. Smooth operation and will relax and cruise when going to the next curvy road where it’s light and fun and easy to row through the gears.
No room for another toy and he’s not selling. But we still play the game.
I’ll likely pick up a bike since it can slide in the garage in front of the MGB without much fuss. The wife knows I’m on the hunt. Lol.
The “B” is fun for sure. And some others have over drive or V8/V6!or updated suspensions and drive across Canada. Great cheap little cars. But they do need some love and they are crude compared to most modern machines. And they are fair weather machines too. Lord knows they rust away if treated as a daily driver year round.
You own a company. Your company borrows $9.2M from the bank.
You get your company to pay you a $9.2M salary.
Your company declares bankruptcy.
Yeah, I know some of the debt should be secured by some kind of collateral, so the bank seizes those assets. But, you as an owner are personally shielded from liability and walk away with $9.2M (minus income tax) without further repercussions?
It's not that simple. Directors and officers of a company assume fiduciary duties that keep them responsible personally for the corporation's actions. If the dealership was pocketing cash by circumventing loan agreements, they are likely to be held liable for some or all of the debts to shareholders, investors, employees, gov't, banks and sometimes creditors. Directors and Officers insurance does cover them if they simply ran the business according to laws and their bank covenants. If they committed fraud, the law kicks in.
In a lot of cases the ones bilking a company are not personally organized so the receiver can quickly identify assets and have them frozen.
If you want to see some of this in action, read up on Quadradix, they were a bitcoin exchange that bilked millions from the public. The CEO disappeared to India, then apparently died there and was immediately cremated leaving his sizable assets to his widow and his family. The receiver had everything down to the knives and forks in the vacation house seized.
It's nice to see spring on the horizon... I just recently put the summer-time roadster in storage on the monthly trickle charger again for the battery. Out of storage before long now...
It's nice to see spring on the horizon... I just recently put the summer-time roadster in storage on the monthly trickle charger again for the battery. Out of storage before long now...
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