Death of an Automobile Dealership - Repossessed Mobile Homes
Closing a store requires needful attempt and concentration and the items listed below, in no particular order, are minimal considerations when terminating a franchise and closing a dealership operation.
Repossessed Mobile Homes
This Checklist Is Not "All Inclusive". You Should Consult With Your Attorney And Accountant And This List Should Be considered As An added Aid For You To Use To Build Upon When You bestow With Them.
Basic Preparation
1. Officers, Directors and Shareholders
Be inevitable to hold both directors and shareholders meetings and to procure resolutions from each entity, authorizing the dealer to liquidate the dealership, or a astronomical part of the dealership's assets.
Determine either or not the board and shareholders may authorize you a termination bonus and prepay your for your services in "winding down the business". Consult with your accountant and attorney to decide what would be a cheap estimate of payment in the event a enterprise creditor challenges the transaction.
Determine if it is cheap for officers to buy themselves and their spouse vehicles. Pay "Net" "Net", as that would be the sales price if the car were returned to the factory or sold to a purchaser of the business.
The officers should open a new bank account, at a different bank, and: (a) use a Po Box, or private Mail assistance as a mailing address; and (b) use a different check color in order to absolutely decide pre and post closing checks written.
Authorize payment to and pre-pay the company's attorney and accountant with a retainer. Their services will be needed to properly close the enterprise and the enterprise might not be able to pay them later.
Authorize pre-payment of anyone services or supplies the enterprise will need to be serviced while the wind-down period. For example, property and personal insurance, real property taxes (if the property is not owned by a third party), rent, utilities and such.
2. The factory and Insurance
A one-sheet overview of the lease should be attached to the original, in order to facilitate matters. The overview should contain such items as: the dates of the base term; the base rent; the current rent; the dates of any selection periods, together with notations regarding rent increases; the factory ownership; the lessee and lessor; a notation as to either or not the factory has point, or site protection; the rent as an equivalent to the dollar value per new unit sold; and, a notation as to either Or Not The Lease Is Assignable and under what conditions.
Other considerations regarding the factory lease contain violations of the Ada, dangerous materials (underground gas tanks, or private oil disposal tanks) being placed on the property.
Owned Facilities
With respect to receiving "factory termination assistance", some Sales and assistance Agreements, general Motors for example, make a inequity in the middle of "owner occupied" and "leased" dealership facilities. Be sure to read your Sales and assistance business transaction in order to understand and be able to capitalize on the distinctions.
Leased Facilities
If the selling dealer's rent factor prior to the sale of the dealership is within factory guidelines the factory should make the dealer's lease payments for the duration specified in the assistance and Sales Agreement. (See, however, the Epa section.)
Check with your guarnatee agent to decide the requirements for insuring an empty building.
Other Insurance
In increasing to factory guarnatee the dealer will need a "tail" or rider on his or her carport keepers insurance. Most guarnatee today is "claims made" versus "occurrence".
In actual practice, most cases that are placed are placed within the guarnatee course limits and the guarnatee enterprise will have paid for both the defense and the settlement.
With respect to curative Insurance, dispose for Cobra all employees of the company. Again, officers and directors may be able to contain curative guarnatee payments as part of their wind-down compensation.
3. Ucc, Mechanic's Lien and Title Searches
Most dealers are not cognizant of all existing liens on dealership's assets.
In order to accurately estimate the selling dealer's imaginable net proceeds, all of these liens will have to be discovered, preferably, prior to negotiations.
Possession of title reports and Ucc-1 reports will give the dealer enough time to address the issues and to have readily ready answers, if and when a prospective purchaser raises the issue.
4. Taxes Due and Anticipated
The dealership's comptroller or accountant, should prepare a sheet of all taxes currently owed by the dealership and all imaginable taxes. The list should identify the amount, to who owed and the reason. In inevitable states unpaid taxes have a "superlien" status and if unpaid the selling dealer's assets can and will be attached to recover unpaid taxes due by the selling dealership. This attachment can occur months after the dealership has closed.
As a general rule, anyone authorized to sign on the checking account can be held personally liable for at least ½ of the payroll withholding tax, as well as 100% of all of the sales taxes due. In addition, in some instances dealers have been held personally liable for monies collected from customers that should have been treated as "trust" monies, such as: customer trade payoffs, customer credit and life guarnatee premiums, and customer warranty and assistance covenant premiums.
5. Notes and Accounts Receivable From Others
The "Notes and Accounts Receivable - Other" account is normally a "catch-all" account on the dealership statement. For purposes of a dealership sale, this account should be purified (1) in order to warn the dealer of any extra funds, which may be ready for final sales and property taxes and (2) to make both the dealer and accountant aware of any "in-house" loans to officers, directors and employees, which may have to be repaid.
6. Prepaid Expenses
The prepaid price account is an additional one "catch-all" account that must be purified. When scheduling the prepaid price account the comptroller should make a standard hunt for all lease and covenant deposits. In many instances, assistance tool on lease, vehicles on lease, computers on lease, and other leases made to the dealership carry safety deposits, or the last month's payment, or both.
7. Dealership Employees
Along with the general employer-employee relations, there are two very important legal areas that may sway automobile dealers: (a) pension fund liability; and (b) state and federal laws regarding closings.
In some states the selling dealer could be personally liable for funding employee pension funds; while in others the dealer must give employees expand consideration of any closing. Also, the United States Congress passed legislation regarding "closings". In the instances of "closings", both state and federal laws put a minimum on the estimate of persons employed, normally 50 or 100, before the law applies to the dealer's company. Check the Hart Scott Rodino Act (Hsr) and the Warn Act.
With respect to wages, some jurisdictions have enacted statutes making inevitable shareholders personally liable for corporate debts owing to laborers and other employees. Welfare and pension funds also qualify as wages under New York's statute.
The comptroller, or accountant should prepare a
list of these liabilities, to contain any amounts due the employees, with respect to accrued vacations, withholding taxes, pension and profit sharing plans and wages, as of the date of close.
Insofar as the actual terminations are concerned, if the dealership is "union", the dealer should talk to the union's representative in order to be sure that all of the conditions of the union covenant are met.
8. Long Term Debt
All long-term debt should be itemized and a method of repayment determined. Interest should be computed. When past due interest and past due payments are added to the loan balance, the loan pay-offs are commonly higher than anticipated.
The comptroller should prepare a list of these debts, to contain the estimate owed together with interest, to who owed, purpose of debt, maturity, terms and safety given. In addition, after the list is completed, the comptroller should keep a running total, daily, through close of escrow.
9. Other Notes Payable
As with long-term debt, other notes payable should be listed by estimate together with interest to date of close, to whom owed, purpose of note, maturity, terms and safety given; and arrangements should be made to retire the debt.
10. The Financial Statements
The sell automobile enterprise is one of the few businesses requiring a faultless closing of all books and records, promptly, at the end of each and every month. Factories and finance companies want reporting on factory originated, or beloved forms.
In establishment the store for closing, a reconciliation statement may be used, explaining categories such as "other earnings & expense", warranty, finance and guarnatee earnings not shown on the statement, along with extraordinary items.
You will need a final financial statement for tax purposes.
11. Warehouse of Records
Dealerships amass a great deal of paperwork, the safe, accessible, Warehouse of which will gift a needful qoute to the selling dealer. No dealership report will be as important as it is on the day it cannot be found. Former dealers have related stories of attempting to retrieve documents from mini-storage facilities, in both rain and snow.
The standard time duration should be determined, only after the dealer's accountant and attorney have considered and advised the dealer with respect to statute of limitations problems and other document retention regulations, peculiar to the political area in which dealership is located.
12. In-House assistance Contracts
If the dealer has sold any "in-house assistance contracts", the selling dealer will not want Former customers calling at his or her home for repairs, or complaints; therefore, a system of service, along the following lines, should be negotiated with a dealer placed in close presence to the closing store.
13. The Hard Assets
Parts and Accessories
Each factory has its own definition of "returnable" parts and returnable accessories. Most also contain a discount for packing and shipping.
Just prior to closing, a computer printout ought to be obtained listing all parts and accessories, their purchase date and cost in invoice.
Parts and Accessories need to be segregated into "returnable" and "non-returnable" categories. Returnable parts and accessories need to be inventoried and packaged according to the factory's specifications
Non-returnable items need to be marketed to other dealers or parts houses such as "Napa". Note: Some "non-returnable" parts may in fact be returnable to the victualer from who it was purchased, such as Delco, MotorCraft, Mopar, Napa, etc.
Do not mark on or damage original packages when inventorying or packing as some factories will not classify items in marked packages as "returnable".
Be sure to account for aftermarket items such as Gas, Oil & Grease, Nuts, Bolts, Supplies, Work in Process and mend Order (Need to procure A/Rs), Signs, Tools, Miscellaneous tool & Supplies.
Furniture, Fixtures and Equipment
The hard assets fall into two categories: (a) Those repurchased by the factory, such as special tools, parts equipment, signs, some computer systems, etc.; and those not repurchased by the factory, such as desks, chairs, etc.
Repurchased and non-repurchased items should be segregated and an account / auction assistance contacted to bid the auction on the non-repurchased items. When inspecting the auction, terms such as advertising time, location, minimum bids, guaranteed minimums from the auctioneer, and so forth, must be considered.
Leasehold Improvements
The value of Leasehold Improvements is commonly lost in the termination process.
Vehicles
While accomplishing a new car account valuation is a relatively, routine matter, it is also time consuming; consequently, in order for a dealer to perceive full value, or each vehicle, at time of transfer, a checklist must be compiled and maintained. There are inevitable additions to, and subtractions from, the invoice price that must be made.
The inequity in cash to be paid by purchaser's flooring entity to the dealer's flooring practice can be considerable, especially with respect to domestic lines, where holdback monies routinely midpoint in the middle of 0 and 0 per unit, or more.
A dealer needs to be aware of this figure, early on in order to contribute for the contingency while negotiations.
Various states have laws more liberal than the factory's Sales and assistance Agreements and the specific laws of the terminating dealer's jurisdiction should be review. For example, Maine requires that the factory repurchase terminating dealers' whole new car inventory, regardless of model year. Some states want the factory repurchase only current model year vehicles and others current plus one year carry-over.
In Mso states, the dealer should operate all car keys and Msos - if the lender does not already have them.
Prepare to liquidate used vehicles and any dealership vehicles such as parts trucks, courtesy vans, demonstrators and snow plows. It is commonly easier to procure a good price for them by not letting anyone "cherry pick". Some wholesales should bid them as a "group".
Make list of carryovers and if the factory will not repurchase them have the wholesalers bid them separately and also shop them with other dealers.
Dealer plates must be surrendered and accounted for when the dealer license is terminated.
13. Appraisals and Auctions
There are a estimate of competent, recognized appraisers, our firm could recommend. In order to maximize the dollar value of an estimate or auction, the dealer should perceive Some firms, decide how they operate, what records will be required, the method for valuing. After obtaining such information, the dealer should know the definite form and schedules needful in order to maximize the estimate or sale of the fixed assets. In addition, by assigning an employee to wholly prepare the assets and schedules, the dealer will good understand the value of the assets at the premises.
Perhaps the greatest problems, with respect to appraisals and auctions, are: (1) neither party takes the time to understand the methods and mental used by the appraisal/auction company; and (2) the dealer roughly never adequately prepares the assets and schedules. We invariably find that all of the dealership's assets do not appear on schedules, either because they have been fully depreciated, or because of an error.
14. Contracts for Services
Service maintenance contracts and personal assistance contracts should be reviewed for personal guarantees, term and assignability. An oversight could mean that personal liability, for performance, would remain with the selling dealer. assistance maintenance contracts should be scheduled, with the detail indicating the estimate of each payment, duration of agreement, assistance to be rendered, and any personal liability. Any contracts that can be cancelled should be calendared for cancellation.
15. Contingent Liability and Reserves
The dealer should know the estimate of all excellent sell paper, which has been unconditionally guaranteed by the dealership, or the dealer. The dealer should know which the dealership's sustain account will be branch to fee backs, for early payoffs and the amount, if any, of recourse against the dealer and the dealership.
A spreadsheet of the excellent contracts should be compiled, detailing, in increasing to collateral description, remaining term and delinquency status, and credit grade, such as A, B, or C, or anyone system the finance enterprise uses. The type of recourse, midpoint monthly sustain charge-backs and the current sustain equilibrium should also be included.
Shortly after informing the financing institutions of the dealer's intent to close the dealership, the lenders should again be approached, regarding the availability of any "walk-away" programs. Furthermore, in the event the dealership has been operating with reduced sustain retention, the estimate required to bring the reserve(s) to standard, upon cessation of sell operations, should be determined. On occasion, this estimate has proved to be significant.
Eventually, when confidentiality is no longer an issue, the dealer should discuss with the lender, the handling of hereafter repossessions, extensions, renewals and other maintenance functions. If the prior dealer-lender relationship was good, the dealer will study that an imaginable estimate of help ready from a cooperative finance company.
Lastly, if the dealer discovers a large contingency, a inevitable degree of assistance may be negotiated with the buyer.
16. Accounts Receivable and Cash
Cash
While apparently obvious, dealership cash must be considered. commonly a new checking account should be opened at a financial practice that is not affiliated with the dealer's current business. Also, if possible, a locally owned bank should be used, versus a national bank. The dealer should think reducing the estimate of signatories on the checking account(s) to two, one of which is the dealer and, effective the day of the close, the estimate of signatories should be reduced to the dealer needful only.
Factory Receivables
From the occasion a decision to close the store is reached, factory receivables should receive concentrated attention. The very instant an awareness of the pending closing reaches the factory, the payments cease.
Try to decide all qoute receivables, such as warranty disputes, well before the closing. In any event, assistance from the factory, following the close of escrow will be needful to process warranty re-submissions and other problems.
Employee Receivables
Employee receivables should also be wholly analyzed while this first stage. An immediate policy, of no advances, should be established.
Without causing alarm, employee receivables should be scheduled and a course of repayment established. One of the good methods is to prepare a agenda of what each employee owes and, as the final pay periods approach, make inevitable the receivables are deducted from the employee's final checks. Unfortunately, some states do not allow the dealer to set-off debts against wages. Your state's policy/law should be reviewed with your attorney before proceeding to set-off any employee debt.
Customer and car Receivables
The selling dealer should make inevitable that car receivables and customer accounts, other than assistance and parts, are pure. needful adjustments and write-offs should be made, with the purpose of arriving at a receivable shape which realistically depicts the estimate of cash which can be expected.
If the dealership's assistance and parts course has been well monitored, these accounts should pay in an orderly manner. In addition, the dealer should decide either collections should be performed by dealer, and one or more employees, or either the dealer can sell the accounts to a factoring house.
17. Leased Equipment
Not all leases can be cancelled. The dealer should decide which, if any, of the leases have personal guarantees, and with respect to such leases, make a concerted attempt to negotiate a hamlet with the lessor. That assumes that the corporation is insolvent. If the corporation is solvent, than settlements need to be negotiated with respect to corporate leases.
18. Epa Inspection
If the real property is owned by the closing dealer, it is important for the dealer to decide where and what the problems are likely to be. If private gas or oil Warehouse tanks have ever been placed on the dealership real property, the dealer should, if not already available, perceive a private inspection branch and procure a certificate of clearance, or compliance, with respect to it.
Be aware, no agreements in the middle of the parties can modify, or redistribute their respective liabilities, with respect to state and federal laws.
19. Expenses of Transaction
There are inevitable extraordinary expenses, such as real estate estimate fees, advisor fees, attorney and accounting fees, which are incidental to the establishment a dealership for closing. These expenses will be paid both from the dealership general account and directly from the closing dealer's personal account. The dealer should alert the bookkeeper to claim a detach journal, in which to report these expenses, in order that the accountants may readily decide the costs of sale and categories of expenditures, for earnings tax purposes, both personal and business.
Closing Date
Absent exigent circumstances, the dealer should estimate the estimate of time needful to prepare the store for closing, normally roughly thirty days. If possible, the closing should be on a payday.
The Comptroller's Responsibilities
The Dealer's comptroller should prepare, or be responsible for the establishment of, the following items and documents, for transfer:
The Books & Records;
All purchase Orders and Deposits;
The Franchise Termination Letter and the Factory's, or Distributor's Acceptance of the Buyer's Resignation;
The Accounts Receivable List;
Prepaid Expenses;
Preparing a Leased tool Inventory;
Securing Old credit card plates and Machines;
The Parts and Accessories Return, car Return, and Rent assistance demand Letters;
The replacement and/or cancellation of various: Telephone Numbers; Post Office Boxes;
The guarnatee arrangements: life, carport keeper's tail, real and personal property, health, etc.
The Dealer's Responsibilities
The Dealer should prepare, or be responsible for reviewing and supervising all of the items in the checklist and for the establishment of the following items:
Decide on the employees that are required to stay in order to faultless the closing of the store.
Check for sold orders decide either to deliver, cancel, or refer to an additional one dealer.
Cancel enterprise credit cards, together with any phone credit cards and any movable phones - except your own.
Secure telephone service. Set a Voice Mail message regarding a dealership referral.
Determine The Factory'S Obligations With Respect To Its proprietary To Lease And Purchase. Be Sure To Make Claims And Requests For assistance Within The Time duration Specified In The Sales And assistance Agreement.
If necessary, talk to a Realtor and list the factory on the market (lease or sale).
Find out where credit card monies are deposited and move the account if it is in the same bank where the company's general account resides.
Close out, or replacement to an additional one dealer all active assistance Ros. If possible, negotiate a referral fee.
Create a press release for store closing.
Cancel all new car orders that are not scheduled, do not order any new cars.
Close out all assistance Ros so that work is completed by date of close. Do not accept any work that can't be completed by store shutdown date.
As always, when closing a dealership, you should all the time consult with a qualified attorney and accountant.
ไม่มีความคิดเห็น:
แสดงความคิดเห็น