In September, it was Bill Heard that fell victim to having its floorplan financing yanked by a captive finance firm. Now it's Minneapolis megadealer Denny Hecker's turn.
Chrysler Financial pulled all of its financing in November from Hecker's 18 dealerships and affiliated companies, according to a story first reported by the Minneapolis St. Paul Business Journal.
Hecker promptly filed a lawsuit against Chrysler Financial citing five counts of fraud, defamation, interference with contractual relations and negligent representation.
According to the lawsuit, Chrysler Financial convinced Hecker in 2006 to acquire Advantage Rent-A-Car, a company it has provided fleet financing to since the late 1990s. At the time, Advantage was near bankruptcy which would have left Chrysler Financial on the hook for nearly $70 million, the suit says.
Hecker says that at Chrysler Financial's insistence, he entered into negotiations this year to sell Advantage to a major rental firm to again protect the captive firm from exposure created by the current credit crisis.
The 20-year relationship between Hecker and the captive firm went south, according to the suit, when Chrysler Financial “stalled negotiations” with U.S. Bank on an agreement to establish a blocked-account agreement that would permit the flow of funds after Hecker switched his banking from Wells Fargo & Co. to U.S. Bank.
Chrysler Financial's actions meant Hecker was unable to make payments or receive funds from the captive and resulted in numerous bounced checks to dealerships that Hecker trades vehicles with.
Hecker's attorney tells Ward's both sides currently are negotiating.