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Judge Says Banks Must Lend To Ernie Haire Customers

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By MICHAEL SASSO | The Tampa Tribune

Published: January 6, 2009

TAMPA - Ernie Haire Ford caught a break Tuesday when a federal bankruptcy judge ordered several major banks to continue lending to the bankrupt dealership's customers.

On Tuesday, Judge Michael Williamson ruled that Bank of America, Chase Auto Finance, Huntington National Bank and Harris Bank could not stop doing business with Ernie Haire Ford and its customers simply because the dealership is under Chapter 11 bankruptcy protection.

Those four banks removed Ernie Haire from their dealer network after the dealership filed for bankruptcy in November, which made it harder to find financing for prospective customers.

Attorneys for Ernie Haire urged the judge to force the banks to continue lending to automobile customers as if the bankruptcy filing never happened.

In his ruling, Williamson said it was an interesting legal question whether banks could be forced to do business with a dealership that filed for bankruptcy protection. Complicating things, the banks' agreements with Ernie Haire appeared to give them great freedom to stop lending with short notice.

However, Williamson ultimately ruled the filing of a bankruptcy case alone isn't enough reason for the banks to cut off Ernie Haire.

During a court hearing Tuesday, the banks' attorneys never explained why the banks wanted to cut off the dealership. Ernie Haire's attorneys insisted the banks loan money to the dealership's customers, not to the bankrupt dealership.

The only clue to the banks' rationale came when an attorney for Chicago-based Harris Bank told the judge that there are risks to doing business with a bankrupt car dealer.

Approached by a reporter, Harris Bank attorney Edwin Rice declined to elaborate.

Ernie Haire has about 175 employees. Its principal office is at 9545 N. Florida Ave. in Tampa. The bankruptcy filing includes other Ernie Haire companies, such as Big Dog Motorcycles of Tampa, Ernie Haire Used Car Auto Mall, Ernie Haire Used Car Supercenter of Tampa, and a local Quick Lane Tire & Auto Center.

Reporter Michael Sasso can be reached at (813) 259-7865.

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