About This Blog
Current decisions, news and commentary regarding commercial bankruptcy cases in Delaware.
Morris James Blogs
Blue Springs Ford Sales, Inc. Files for Chapter 11 Protection
On March 21, 2012, Blue Springs Ford Sales, Inc. (the “Debtor”) filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware. The petition lists both assets and liabilities between $10 million to $50 million, with the number of creditors estimated to fall between 200 and 999.
The first-day declaration (the “Declaration”) of Robert C. Balderston, the President of the Debtor, asserts that the Debtor has been in the business of selling and servicing new and used Ford vehicles as an authorized and approved dealer for Ford Motor Company since 1978, employs approximately 124 people, and has a monthly payroll of approximately $557,000. Although the Debtor reported net revenues of approximately $60,800,000.00 during the fiscal year ended December 31, 2011, the Debtor’s involvement in pending state court litigation (the “State Court Litigation”) led to the Debtor seeking Chapter 11 protection, according to the Declaration.
In the State Court Litigation filed against the Debtor, a jury awarded actual damages of $171,520 and punitive damages of $1,750,000. The judgment was subsequently amended to include attorneys’ fees in the amount of $137,070. Through the bankruptcy process, the Debtor intends to restructure its debt obligations to enable it to satisfy the claims of its pre-petition, secured lender, vendors, and other creditors under a plan of reorganization, as well as to pursue its appeal of the state court judgment discussed above, according to the Declaration.
The case has been assigned to Judge Mary F. Walrath and is being administered under Case Number 12-10982.