Receiver for Automotive Buy Here, Pay Here Dealership Chain Involving Fraud
Inglewood was appointed as receiver for this three location dealership when the owners defaulted on their loans. The owners cleared out their offices immediately prior to the receivership. Shortly after Inglewood's arrival, it was discovered that the company had overpaid for its cars, had performed no safety checks on cars sold to the public, had no controls over its fleet, and had sold cars to un-creditworthy customers. Further, the company stopped collection efforts on delinquent accounts so as to not alert its lender to the existing issues and covered up these problems by falsifying its aging of the loan receivables. Finally, there were virtually no controls or management over the service department and it was suspected that ordered parts might not have ended up in the company's vehicles. During this engagement, Inglewood directed the correction of the aging, identified and made collections on or wrote off a significant number of delinquent loans, outsourced several ineffective operations, improved the delinquency rates and made significant strides toward right sizing the company's cost structure. The company had been receiving a call or two each week from the State of Ohio's Attorney General's Office, following up on customer complaints. After the Inglewood implemented changes, the company received only one call from the Attorney General's Office during the following year and a half. The company's lender stated that they were very pleased with Inglewood's efforts and continued to provide financing. Ultimately, the company became profitable; the lender credit bid for the assets and the lender is considering expanding the business to new geographic areas.