America’s largest Chevrolet dealer, the now-defunct Bill Heard Enterprises, today told a bankruptcy court it is in debt nearly $240 million to multiple creditors. Bill Heard Enterprises said it owes $229 million to GMAC, BMW Financial, and JP Morgan, which financed its vast inventory. Another $7 million is owed to various creditors, while $3.2 million is owed in sales taxes.
As reported on Wednesday, Bill Heard closed all of its stores in Alabama, Florida, Georgia, Nevada, Tennessee and Texas, leaving about 2,700 workers. Most workers had no advanced notice they’d be out of a job. As a result, two employees have filed a class action lawsuit claiming wrongful termination, according to the Associated Press.
Founded in 1919, the Heard dealer network has long focused on big stores with big volume, hence the slogan “Mr. Big Volume.” In recent years, the company became known for brokering loans for people with bad credit histories.
In many cases, Heard Enterprises was able to obtain financing for subprime customers willing to pay outrageous interest rates — as high as 28 percent. Many of these obscene loans were issued by National Car Credit — a subprime lender in Columbus. Its CEO? Bill Heard Jr, of course.
“His business model was really out of step for the times,†Mark Rikess, a consultant to major car dealers told the Atlanta Journal-Constitution. Heard “certainly targeted subprime buyers,†Rikess said. “Even without subprime buyers, he would have had a problem.â€
The collapse of subprime lending — “the final nail in his coffin.â€
In its bankruptcy filing, the company said each of its 14 dealerships was losing between $2 million to $5 million a month. The culprit? Slowing demand and a lack of available credit.
