Denny Hecker sues Chrysler Financial over credit lines
Minneapolis / St. Paul Business Journal - by John Vomhof Jr. Staff Writer
Twin Cities auto dealer Denny Hecker is suing Chrysler Financial Services America, alleging that the lender acted in bad faith and significantly damaged Hecker’s business when it “suddenly and without notice” placed a hold on his credit lines in mid-October.
Hecker and his companies were unable to purchase new cars because of the credit freeze, according to the federal lawsuit, filed Thursday morning in Minneapolis.
Chrysler Financial’s “unjustified and unreasonable actions and demands have interfered with Hecker’s business operations and dealings, causing extensive damage to Hecker and his companies’ goodwill and reputation,” the suit states. Its actions also “seriously jeopardized, if not fatally imperiled, Hecker’s attempt — which was initiated at Chrysler Financial’s insistence — to sell his car-rental business,” the lawsuit says.
Chysler Financial declined to comment.
For almost 20 years, Chrysler Financial has provided fleet financing to Hecker’s vehicle-leasing business and floorplan-financing to his dealerships. The lender also has provided fleet financing for Advantage Rent A Car, which Hecker bought in February 2006.
Floorplan financing is a loan for a dealership’s vehicle inventory that is secured by the financed vehicles. Hecker used such loans to buy new cars from the factory, trade for new cars from other dealers and purchase some used cars. Interest is paid until the vehicle is sold, at which time the loan proceeds associated with that vehicle are remitted to Chrysler Financial.
Hecker also alleges that when he recently switched his banking from Wells Fargo & Co. to U.S. Bank, Chrysler Financial “stalled negotiations” with U.S. Bank on an agreement to establish a blocked-account agreement that would permit the flow of funds. Without that agreement, Hecker and his dealerships were unable to make any payments or receive funds from Chrysler Financial. The banking problems recently resulted in a number of bounced checks from Hecker to other dealerships with which he traded cars.
When reached by the Business Journal on Thursday, Hecker declined to comment further on the lawsuit and Denny Hecker Automotive Group President Barbara Jerich referred comments to the company’s attorney, Briggs and Morgan’s Tim Thornton.
Thornton dismissed a Star Tribune report that Hecker is “expected to file for Chapter 11 bankruptcy protection for several of his businesses, possibly as soon as today” as “pure speculation.”
jvomhof@bizjournals.com | (612) 288-2101
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