Easy come, easy go huh - another Sydney Skoda dealer goooone?

[RSOK]

News Alert: Top Sydney Dealership Bankrupt? | Car Advice | Reviews

Rick Damelian insolvent?

[Jake02]

I just read that too... That's what happens when you only sell one major-selling brand (Honda)! Come to think of it, has anyone on here actually bought a Skoda from Rick Damelian?

[Inego]

I just read that too... That's what happens when you only sell one major-selling brand (Honda)! Come to think of it, has anyone on here actually bought a Skoda from Rick Damelian?

Not that I know. I've only service and parts.

But it is/was pretty convenient for servicing ( better than Burwood), so I hope someone else in the inner west picks up Skoda if they're gone....

[brad]

I just read that too... That's what happens when you only sell one major-selling brand (Honda)! Come to think of it, has anyone on here actually bought a Skoda from Rick Damelian?

Did Damelians have Subaru for a while? And Saab (when they were popular). A few others too? He used to sell lots of Suzukis from there back in the GTI days.

I almost bought a Saab kombi coupe off them in 1997. Dodged a bullet there - ended up with a U13 Bluebird. Phew!

[wai]

If the dealership has gone under, there is a fair chance that there will be quite a few buyers who have paid a deposit and are awaiting delivery of their vehicles. As is usual in these cases, those who have paid deposits are unsecured creditors and so the liquidator considers the deposits paid as property of the company being liquidated. How much those making the deposits will get back will depend on what is left over after the secured creditors have picked over the bones.

I have been caught up in the liquidation of a client (I am a Consulting Engineer) and lost close on $10,000. A colleague of mine manufactured a machine that cost over $100,000 and delivered it just one day before the liquidators moved in. It is now over 10 years since that, and he has not seen one cent for the machine. As the machine was inside the "buyer's fence", the liquidator considered it to be company property.

If the business is sold, it will be sold minus debts so those who have paid deposits will still miss out.

[Darth]

"Unconfirmed reports suggest" and this is written on a Blog website with no ties to any of the major media companies in Australia. Hmmm.

At 10am this morning, Rick Damelian Pty Limited et al (ie the entire automotive group) was placed in receivership.

Source: Rick Damelian Honda.

[brad]

. A colleague of mine manufactured a machine that cost over $100,000 and delivered it just one day before the liquidators moved in. It is now over 10 years since that, and he has not seen one cent for the machine. As the machine was inside the "buyer's fence", the liquidator considered it to be company property.

My previous employer had a similar issue with one of our vendors & they went belly up the day before delivery of an engine hoist/dolly/transporter thingy was due. We had to go to the liquidators auction to buy a piece of equipment that we'd already paid 80% of the cost for. In the end it wasn't too bad as we were the only people in AUS that had any use for the item & we paid 40% of the contract price (ie: it cost us 20% more than we had budgeted). To add insult to the whole thing, the equipment was a POS & never worked as advertised & we flogged it of to some other poor sod after years of trying to get it to work right.

[VAG newbie]

That's sad. Even as a major brand, Honda has been suffering this year and is almost kicked out as the top 10! All the other brand it sells, other than Suzuki that actually sells cars, what do we have? Alpha Romeo? Fiat? Renault? Citroën? Yeah, it's only a matter of time.

Even if they still sell Sabb won't help....

Hmm... Let's see my dealer, he sells Ford and VW as well as Renault, I should be OK.....

[Inego]

If the dealership has gone under, there is a fair chance that there will be quite a few buyers who have paid a deposit and are awaiting delivery of their vehicles.

AAP is reporting that the receivers will be negotiating with manufacturers/impoerters regarding delivery of orders where deposits have been taken. Funnily enough, Skoda isn't mentioned as a Damelian brand in the reporting.

Looks like I need to find yet another place for servicing.....

[Darth]

If the dealership has gone under, there is a fair chance that there will be quite a few buyers who have paid a deposit and are awaiting delivery of their vehicles. As is usual in these cases, those who have paid deposits are unsecured creditors and so the liquidator considers the deposits paid as property of the company being liquidated. How much those making the deposits will get back will depend on what is left over after the secured creditors have picked over the bones.

I have been caught up in the liquidation of a client (I am a Consulting Engineer) and lost close on $10,000. A colleague of mine manufactured a machine that cost over $100,000 and delivered it just one day before the liquidators moved in. It is now over 10 years since that, and he has not seen one cent for the machine. As the machine was inside the "buyer's fence", the liquidator considered it to be company property.

If the business is sold, it will be sold minus debts so those who have paid deposits will still miss out.

Always best to make any pre-payments with the notation on the cheque and/or contract as being:

To XXXX XXXX on trust for ME ME ME.

That way the company only has custody of the funds, with all of the obligations of a trustee to hold the funds for the beneficiary.

[wai]

AAP is reporting that the receivers will be negotiating with manufacturers/impoerters regarding delivery of orders where deposits have been taken.

It will be interesting to see what value they get on their deposits. Typically unsecured creditors end up with less than 30cents in the dollar as the reason the business folds is because it cannot repay its loans to the secured creditors. Secured creditors get first pick of everything, then the unsecured creditors. Even with the unsecured creditors, there is a ranking, and the poor car buyers (in this case) will fall way down the list.

If anyone is caught up in this, make sure you get to creditors meetings and DO NOT VOTE TO TRY AND TRADE OUT. All this will do is see you get even less as the purpose of trading out is to ensure that the secured creditors get more of what they are owed. Vote to wind up immediately. This will see you get the most out of any payout.

[Darth]

It will be interesting to see what value they get on their deposits. Typically unsecured creditors end up with less than 30cents in the dollar as the reason the business folds is because it cannot repay its loans to the secured creditors. Secured creditors get first pick of everything, then the unsecured creditors. Even with the unsecured creditors, there is a ranking, and the poor car buyers (in this case) will fall way down the list.

If anyone is caught up in this, make sure you get to creditors meetings and DO NOT VOTE TO TRY AND TRADE OUT. All this will do is see you get even less as the purpose of trading out is to ensure that the secured creditors get more of what they are owed. Vote to wind up immediately. This will see you get the most out of any payout.

Yeah, but trading out, by definition, would see cars delivered and contracts fulfilled, so such deposit holders would get their money's worth.

Even so, a creditor owed a $500 deposit is not going to have much sway in a creditors' meeting with at least one bank and other financiers and creditors owed, most likely, tens of millions of dollars.

[Darth]

The appointment of receivers came after an extended period of support by the creditor, who is owed about $80 million by the car dealership.

Read more: Wheels fall off Damelian group

[wai]

Yeah, but trading out, by definition, would see cars delivered and contracts fulfilled, so such deposit holders would get their money's worth.

Even so, a creditor owed a $500 deposit is not going to have much sway in a creditors' meeting with at least one bank and other financiers and creditors owed, most likely, tens of millions of dollars.

Trading out means that they sell cars to NEW buyers. Unfortunately, that's the way it works.

Earlier this year, one of my clients got caught up with Clive Peters. He had paid a deposit on a new widescreen TV, then CP went belly up. They were still trading and selling floor stock when the liquidators moved in, yet he was not able to change his order for one of the floor stock units. He could buy a floor stock unit outright, but what he paid as a deposit on the TV he wanted could not be taken off the price of a new purchase. He lost his total deposit.

Trading out is to maximise the return to the secured creditors. As such, fulfilling existing orders that might have been heavily discounted to get stock moving is not going to achieve as much as selling stock held (even if a deposit was taken on it) with no discount.

One unsecured creditor might not have much sway voting at a creditors meeting, but it is amazing how one person speaking out can change the mood of such a meeting. When I got caught up in such a mess, at the first meeting we were told we would get 75 cents in the dollar if things were wound up immediately. We were told that if we let the business trade out this return would be higher. We foolishly believed this and around 12 months later ended up with less than 20 cents in the dollar. Any creditor can issue a wind up notice (something I learned about well after the loss I suffered).

My accountant refers to liquidators/receiver managers as the "black sheep of the accounting profession". Apparently when they get their degree, they hand over their souls. They act in the interests of the secured creditors only. The rest get to fight over the scraps.

The thing about deposits is that you only ever put down a deposit if the amount is what you are prepared to lose. If you are not prepared to lose the deposit, then don't put it down. Unfortunately you must do this at times, so put the absolute minimum down. Increasing the deposit will NOT get you your purchase any sooner (no matter what you are told).

You can get good people in business but they are rare.

Way back in 1982 I bought my first colour TV. I got a bank cheque and took it over to the store on Thursday evening and was told that I would have it delivered on Monday. On Friday morning I received a call from the salesman who informed me that they were under instructions to take all monies offered, even though they were to be placed in administration the next day. He wanted to confirm my address as he had not actually processed the cheque, but held it. A few days later I received the cheque. Now $800 back in 1982 was a lot of money. Unfortunately this is probably very unlikely to happen now.

[Jake02]

Apparently Rick Damelian Skoda is the only section of the dealership to not be placed into receivership.