An involuntary bankruptcy petition filed this week against Toyota of Augusta should not prevent the pending sale of its assets to a local company, officials said Tuesday.
"They have signed a contract to sell the assets of the dealership to Milton Ruben Motors," Taylor Ward, the vice president and general counsel for Southeast Toyota Distributors, said in a telephone interview. "We are hopeful that a deal can be struck between the creditors such that the sale can go through and we can get the dealership open and service our Toyota customers in Augusta."
James C. Overstreet Jr., an attorney who represents unsecured creditors in the bankruptcy petition, said his clients want that sale to go through.
The bankruptcy action was filed late Monday because, in general, unsecured creditors are better protected in bankruptcy court.
One creditor who tried to halt the sale, CAR DAR GA AUG, owns the property where Toyota of Augusta is located. It filed suit in Richmond County Superior Court, claiming it would suffer $15.5 million in damages if its commercial lease were broken.
But at a hearing Monday, Superior Court Judge Michael N. Annis ruled the sale can proceed. CAR DAR GA AUG is also a party to the involuntary bankruptcy petition.
Toyota of Augusta is currently owned by Darrow Automotive Group. Russell M. Darrow III, of Menomonee Falls, Wis., is the chief executive officer with dealerships in several states.
Toyota of Augusta is still in business. The dealership was closed for a few days but was open Tuesday. An employee there said a few cars were sold. The employee said the business "has inventory that it is trying to clear out."
Darrow Automotive Group took over the dealership in March 2007. It sold the site to CAR DAR GA AUG in May 2008 for $12 million.
Darrow Automotive Group attempted to buy its rival Toyota dealer in North Augusta last year. The deal was unsuccessful, and the Ann Taylor dealership was bought by Bob Richards.
Mr. Ward, of the Southeast Toyota Distributors, said the corporation's objective is to get the dealership to reopen as soon as possible to serve the customers. Calls made to Milton Ruben Motors were not returned Tuesday.
Business writer LaTina Emerson contributed to this report.
Reach Sandy Hodson and Tim Rausch at (706) 724-0851.