Dealerships in distress – Out-of-court workouts are among their options
Abstract: While the worst ramifications of the recession may be over, many dealerships continue to fight for their survival in a frail economy. There are telltale signs that a dealership may be headed toward bankruptcy — but there are several relief methods available to distressed dealerships. An out-of-court turnaround may involve renegotiating debt terms, cutting service hours or combining administrative positions. In a Chapter 11 “reorganization” bankruptcy, the dealership retains its assets as a “debtor in possession” and remains open. As a last resort, there’s Chapter 7 bankruptcy, involving voluntary or involuntary liquidation.