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

[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.

[buzuki]

there is another skoda dealer opening in parramatta and possibly alexandria

[wai]

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

The problem for the Rick Damelian brand name is "who will be the first to put down a deposit on a car from them"? I know I would not. That's the problem when you have these mega dealers handling multiple brands. Failure of even just one brand affects all the brands of the dealership. Maybe manufacturers will take the lead and force them to operate completely independently with unique dealership names.

By the way, this is what has affected Clive Peters after Harvey Norman bought the remains. The name was tainted.

[Jake02]

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The problem for the Rick Damelian brand name is "who will be the first to put down a deposit on a car from them"?

I know and I agree, I'm just saying that they're not in receivership weirdly.

And Buzuki, really?

[icgreen]

Looks like they've already removed Rick Damelian from the dealer network on the Skoda Australia website. Lucky, as I was about to order a DSG RS from them in August but ended up buying an immediate delivery Manual from Northshore.

[buzuki]

I know and I agree, I'm just saying that they're not in receivership weirdly.

And Buzuki, really?

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Yes. I work for the company that is opening it. 1st will be parramatta in roughly a month or so. They came to our dealership to see how things run and what they need to get the ball rolling.

And alexandria is a maybe.