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Claremont Car Dealer In Limbo

Saturday, June 20, 2015
Newport — The fate of a Claremont auto dealership was in doubt on Friday, amid revelations that employees haven’t been paid in weeks and the owner is more than $2 million in debt.

An attorney for Ford Motor Credit Company asked a judge on Friday to let the company seize the inventory at Claremont Ford Lincoln on Washington Street because the dealership’s finances have become hopeless.

The attorney, Steven Dutton, told Judge Brian Tucker that the state on Friday had revoked the dealership’s license and that State Police have confiscated the dealer license plates.

Meanwhile, Matt Johnson, an attorney for the dealership’s owner, said a sale of the business has been negotiated and that time should be allowed to for it to go ahead.

“You want to pull the plug now,” Johnson said in Sullivan County Superior Court during an exchange with a Ford official. “You won’t give him a chance to save the company, save jobs.”

Ford Motor Company officials testified Friday that they oppose the proposed sale because the sale price, $1.5 million, is far less than the dealership and its owner, Arrien Schiltkamp, owe to Ford and others. The name of the potential buyer was not disclosed.

“We have done everything we can to avoid this situation,” Vincent Talia, regional manager with the Ford Motor Credit, testified. “We extended, extended and extended to avoid coming to court. We are unwilling to extend another 60 days to further jeopardize consumers and Ford Motor Credit.”

Talia reviewed a long list of Schiltkamp’s debt with attorney Dutton and said they calculated the total at $2.1 million.

“Unfortunately, $1.5 million doesn’t cover it,” Talia said.

The value of the dealership’s inventory is about $3.26 million. According to testimony, employees have not been paid in two weeks and that has led to a $100,000 fine by the state Department of Labor, it was stated in court.

At the dealership late Friday, an employee declined to comment.

Ford Motor Credit went to court on Friday seeking to seize the vehicle inventory at the dealership, which is in default on payments through the company’s wholesale financing arrangement. The company sought a court order because Schiltkamp refused twice to “surrender the inventory peacefully,” Dutton said.

Tucker did not issue a ruling Friday and the hearing has been continued to Tuesday in Strafford County Superior Court in Dover, N.H., where Tucker will be presiding the next two weeks because the court in Newport will be closed.

Schiltkamp is scheduled to testify on Tuesday. Outside the courtroom Friday during a break, he declined to comment, on the advice of his attorney.

During Friday’s hearing, Dutton told Tucker the dealership’s debt can’t be satisfied through the proposed sale, and Schiltkamp has not done all that was required under a March agreement to infuse the business with capital, reduce aged inventory, pay taxes and pay liens on trade-ins. The failure to pay the liens has left buyers without titles to their cars.

Initially, attorneys for Schiltkamp unsuccessfully sought a continuance Friday, arguing they had been retained just Wednesday and needed more time to prepare for an evidence hearing.

When Tucker ruled the hearing would proceed, the lawyers focused on Schiltkamp’s plan to sell the dealership. A purchase and sales agreement was signed on Thursday. Allowing 60 days for the sale to be completed would benefit not only Ford Motor Credit in recouping its money but also keep the dealership in business and 25 people employed, said Johnson of the Manchester law firm of Devine, Millimet and Branch.

Johnson said Ford Motor Credit gave every indication it favored the sale Schiltkamp has negotiatied, then “pulled the rug out” with a court filing last Friday.

“They said, ‘stay open and sell vehicles.’ We are doing what Ford asked us to do,” Johnson said.

Talia said the dealership’s financial condition only would deteriorate further in the next two months and the proposed sale price of $1.5 million is far short of what Schiltkamp owes to Ford Motor Credit and others, including a mortgage, back property taxes and payroll.

Dutton disagreed about what a sale would bring.

“This purchase price is not enough to remedy the outstanding debt,” he said.

Johnson traced the dealership’s problems to a discovery last summer that Schiltkamp was the “victim of a massive embezzlement” by one of the dealership’s employees.

Ryan Roden, the dealership’s general manager, testified on Friday that the amount of money taken was “substantial,” but also acknowledged that no criminal charges were pursued, no restitution paid and no insurance claim was made.

Roden said after the embezzlement was uncovered, revenue began to increase until late 2014 when Ford Motor Credit reduced the dealership’s used car inventory line of credit, limiting the number of cars available to sell from 60 to 12.

“That is when we really started to go down. We couldn’t create revenue because we had no used cars to sell,” Roden said. “We couldn’t grow or improve our capital condition.”

Roden went on to say that meetings in April on a possible sale had the support of everyone present, including Talia.

“It will satisfy the obligations,” Roden said. “I don’t see any reason why the sale won’t go through.”

Thomas Bouchard, the business development manager with Ford Motor Credit, testified that the dealership’s financial problems go back further than last summer. Bouchard said he spoke with Schiltkamp about the losses on several occasions but the finances never improved.

“The last five years, Claremont has not turned a profit,” Bouchard said, calling the dealership’s performance, “historically poor. Very, very poor.”

Patrick O’Grady can be reached at pogclmt@gmail.com.

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