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Advantage Rent a Car seeks Chapter 11 protection

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DainBramaged Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-09-08 07:46 PM
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Advantage Rent a Car seeks Chapter 11 protection
Embattled Minnesota megadealer Denny Hecker has sought bankruptcy protection for his nationwide rental business, Advantage Rent a Car.

Monday's Chapter 11 filing in U.S. Bankruptcy Court in Minnesota follows Hecker's closing of six dealerships and the sale of three others on Nov. 21.

Hecker has struggled to stay afloat since Chrysler Financial pulled the plug on his entire line of credit on Nov. 7. Chrysler Financial floorplanned most of Hecker's dealerships, including several non-Chrysler brands. It also provided lines of credit for Advantage Rent a Car and Hecker's national leasing business. Chrysler Financial has declined to say why it took the action.

Jon Austin, a spokesman for Denny Hecker Automotive Group, said the company is considering all alternatives for Advantage Rent a Car, including reorganization, a sale or a merger.

"We have been hit with a simultaneous drop in leisure travel, with greatly increased costs and frozen credit markets," Austin said. "These factors are affecting many industries, and we are not immune from those forces. These painful steps are a recognition of that reality."

Hecker, 56, is closing 21 of Advantage's retail locations and firing 440 employees. Ten locations and Advantage's corporate offices in San Antonio will remain open. About 460 employees will remain. Most of the locations were stocked with Chrysler, Dodge and Jeep vehicles.

Hecker, who was injured in a car accident on Dec. 3, still has seven dealerships and his national fleet business. He sued Chrysler Financial in U.S. District Court in Minnesota on Nov. 13, alleging the credit lines were cut off without warning.

Chrysler Financial has not responded to the lawsuit, and no court date has been set.

http://www.autonews.com/apps/pbcs.dll/article?AID=/2008... (subscription only, posted in full)


And so the storm increases.
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