By Alexander Dworkowitz
A bankrupt Ford dealership in Flushing will probably remain a franchise of the American automotive company after it is sold, a trustee assigned to the case said.
Monahan Ford Corp., which had been operating under Chapter 11 bankruption protection from its creditors for several months, went into Chapter 7 liquidation on Feb. 14. The dealership has conducted business in Flushing for decades.
Both its sales office at 150-05 Northern Blvd. and its parts and service center at 37-20 Prince St. closed for several days.
Richard McCord, a trustee for the U.S. Bankruptcy Court in the Eastern District of New York, was given control of the franchise's finances and soon reopened both locations of Monahan Ford.
“I'm operating the business,” McCord said. “I brought back a number of employees to assist me.”
McCord said he had rehired nine of the employees, about half of whom had lost their jobs, and brought in two new hires.
He is negotiating the sale of the franchise with several different parties that are interested in keeping it a Ford business.
The franchise is $4 million in debt, McCord said, most of which is owed to Ford Motor Credit Corp., the company that makes loans to Ford franchises.
More importantly, the Ford Motor Co. wants to keep its Flushing location, McCord said.
“Ford has given me the indication that they are very interested in keeping this location a Ford franchise,” McCord said.
The Flushing business filed for Chapter 11 bankruptcy protection in October, McCord said. In February, it was converted to Chapter 7, and the process to liquidate its assets began with the hiring of McCord.
McCord believes the bankruptcy was caused by “poor management techniques” and that Ford obviously thought the location still could be profitable.
Lisa Golden, the attorney representing Monahan Ford, said the franchise's push to improve its dealership contributed to its debt.
“From the records, it appears that there were issues of undercapitalization,” she said. “They were trying to make a significant number of improvements.”
Golden said the franchise was in the process of making physical improvements to its property as part of Ford's Blue Oval Certification Program. Under the program, Ford Motor Co. allows the franchise to keep a larger percentage of its profits in exchange for the franchise's making capital improvements.
Business has been relatively strong at the service center since it reopened, McCord said.
“It's generating a lot of activity,” he said. “I am not advertising. I am doing nothing.”
Reach reporter Alexander Dworkowitz by e-mail at Timesledger@aol.com or call 718-229-0300, Ext. 141.
