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Ernie Haire Buyers Cut Off By Banks

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By MICHAEL SASSO

msasso@tampatrib.com

Published: January 2, 2009

Updated: 01/02/2009 06:55 pm

TAMPA - Seven banks and financial institutions are refusing to make vehicle loans to Ernie Haire Ford customers, which could make it even more difficult for the dealership to emerge from bankruptcy.

Attorneys for Ernie Haire seemed puzzled this week by the banks' reluctance to lend, because the banks lend directly to customers, not to Ernie Haire Ford.

According to documents filed in its Chapter 11 bankruptcy case, these lenders stopped providing loans to Ernie Haire customers after it filed for bankruptcy protection: Bank of America, Wells Fargo Auto Finance, Capital One Auto Finance, Chase Auto Finance, Huntington National Bank, Harris Bank and Aimbridge Indirect Funding. Aimbridge is a business that represents several credit unions, said Todd Hodges, in-house counsel for Ernie Haire.

In addition to declining to write future loans, in a few cases the financial institutions stopped payment on car loans that they had already approved. In those cases, the customers took possession of the vehicles, but the lenders didn't come through with the loans, Ernie Haire's attorneys say in documents.

The Tampa dealership has asked U.S. Bankruptcy Judge Michael Williamson to force the lenders to continue making loans to Ernie Haire customers, and to force them to follow through with the loans they have already approved. Williams may hear the issue at a Tuesday hearing.

Hodges said the lenders haven't given Ernie Haire a satisfactory answer about why they won't lend to its customers. The dealership has other lenders it is still working with, but wants to offer its customers the most financing options, he said.

Herb Donica, lead attorney for Ernie Haire Ford, said many banks are cautious about lending right now because of the nationwide credit crisis. He wonders whether the dealership's bankruptcy filing spooked them.

"I've never seen this come up before," Donica said.

In one filing, Harris Bank says it will fund those loans that it has already agreed to issue. However, without really explaining why, the bank says it no longer wants to make loans to Ernie Haire customers. It also argues that there is "no contractual or other legal basis to compel Harris Bank to extend credit or make financial accreditations to or for Ernie Haire's benefit."

Attempts to reach attorneys for Harris Bank, as well as attorneys for Huntington National Bank, Aimbridge, and Capital One, were unsuccessful Friday. Wells Fargo, Bank of America and Chase do not list attorneys in the case.

Ernie Haire is one of at least five local car dealerships that have closed, filed for bankruptcy protection, or done both in the past year. Bob Wilson Dodge of Tampa and the parent company of Bill Heard Chevrolet of Plant City filed for bankruptcy protection last year. Fort Lauderdale-based AutoNation recently closed two of its Bay area dealerships, AutoWay Chevrolet in Tampa and AutoWay Dodge in Clearwater.

Aside from its bankruptcy, Ernie Haire has suffered from a huge court judgment against it in October. A circuit judge in Hillsborough County ordered the dealership to pay plaintiffs in a class-action lawsuit and their attorneys about $6.9 million. The case involved fees that Ernie Haire charged customers for etching vehicle identification numbers on car windshields.

Tribune researcher Michael Messano contributed to this report. Reporter Michael Sasso can be reached at (813) 259-7865.

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