Napa Chrysler, Jeep, Dodge, Ram files Chapter 11 Bankruptcy in midst of Buy/Sell

[XDCX]

A news report from the Napa Valley Register indicates that Napa Chrysler, Jeep, Dodge, Ram has filed Chapter 11 bankruptcy. For the full report - click here

While the filing of a Chapter 11 bankruptcy in the midst of automotive retail market that most would describe as "red hot" the fact that it allegedly happened while the dealership was in the midst of a buy/sell makes the situation even more odd.

The newspaper report suggests that a poor reputation and a current "F" rating by the Better Business Bureau may explain why the reason the dealership is struggling.

[XDCX]

Although it was a bit before my time I'm 98% certain that the Dealer Principal for Napa CJDR, Patrick Smorra, was a Regional Manager for Chrysler based out of Los Angeles in the mid 80s. (For Chrysler, a Regional Manager would be a top ranking position with all of the Zone Managers, Zone Staff and District Managers reporting to that individual.)

If my recollection is correct, Patrick Smorra was the Regional Manager for Chrysler's Sales Division and had control over all the western states. Back in the 80s Chrysler would have had 25 Zone Offices that reported to 5 Regional Offices.

It appears that Patrick Smorra had a son with the same name and that's who is currently running the business; Patrick Smorra, Jr.

[mryan55]

I know of a former sales executive in the Denver Business Center who has acquired a single CDJR point but has expanded into Kia and Chevrolet as well.

Not sure if they weren't well capitalized enough or what, but their Kia and Chevrolet efforts didn't last very long. The CDJR store is still around and quite successful though.

[XDCX]

Here's a news report that has more information concerning the Chapter 11 bankruptcy filing - click here

I thought it was interesting that two of the creditors were the IRS and the State Board of Equalization. While we all know the former, the latter is the agency that collects sales tax in the state of California. I'm guessing that neither has much tolerance for accounts payable...

I'm not 100% certain, but it's my understanding that IRS debt will follow a person until they reach their grave - it cannot be discharged via bankruptcy.

[rd3311]

Pat Smorra Sr was Chrysler Plymouth brand manager back when the late Joe Campana was the Dodge brand manager beween 1984-1990. Tom Pappert was the GSM at that time.

Smorra Sr and Bozell came up with the old "the nine most important words Plymouth knows" marketing tag line back in 1989.

I think that I still have that old beach towel somewhere with that on it that they gave to us at new car showing in Hawaii back then.

[XDCX]

Originally Posted by rd3311

Pat Smorra Sr was Chrysler Plymouth brand manager back when the late Joe Campana was the Dodge brand manager beween 1984-1990. Tom Pappert was the GSM at that time.

Interesting - thanks for the information.

Do you recall if Smorra was ever the West Coast Regional Manager for the Sales Division or is my recollection wrong?

Originally Posted by rd3311

Smorra Sr and Bozell came up with the old "the nine most important words Plymouth knows" marketing tag line back in 1989.

I think that I still have that old beach towel somewhere with that on it that they gave to us at new car showing in Hawaii back then.

OK, I'll admit it - I couldn't remember "the nine most important words Plymouth knows" and had to look it up with Google....

[rd3311]

Smorra Sr was sent to LA as Western regional manager in 1990. Darrell Davis was the Eastern regional manager at the same time frame. Darrell Davis later replaced Jerry Farrell at Chrysler Financial as CEO when Mr Farrell retired. Mr Davis is now retired and lives in the Orlando area.

[srt]

Pat Smorra was a zone manager in Syracuse for a short time. My memory of him was a very quiet type of person.

[XDCX]

Originally Posted by rd3311

Smorra Sr was sent to LA as Western regional manager in 1990. Darrell Davis was the Eastern regional manager at the same time frame. Darrell Davis later replaced Jerry Farrell at Chrysler Financial as CEO when Mr Farrell retired. Mr Davis is now retired and lives in the Orlando area.

Thanks for the information - I was pretty sure I remembered correctly but wasn't 100% certain.

It's also interesting to look back at the career of Darrell Davis when he left the "Motors" side and went to the "Financial" side. (I put "Motors" in quotes because that's how a Chrysler Financial Branch Manager always used to distinguish Chrysler's automotive operations from their financial operations - I think it was common terminology within the CF ranks.)

The early 90s was an era when Chrysler was big into "cross-training" and there was also a lot a job switching between the Sales and Service divisions of Chrysler that would have been unheard of in the past.

[XDCX]

Originally Posted by srt

Pat Smorra was a zone manager in Syracuse for a short time. My memory of him was a very quiet type of person.

Wow, that's interesting because the only reason I knew Smorra owned a Chrysler store was because he was a somewhat vocal critic of a presentation at a Chrysler Dealer Meeting in Hawaii.

I remember asking someone who he was and what store he owned - that's when I learned Smorra was ex-factory.

[XDCX]

News reports indicate there's been an interesting development in Napa CJDR's Buy/Sell - for the full report - click here

As we previously discussed, Napa CJDR was reportedly in the midst of a Buy/Sell when they filed for Chapter 11 Bankruptcy. As part of the bankruptcy proceedings the landlord offered to pay $1.5 Million to terminate the long term lease since the current lease rates were below market value. The Bankruptcy Court accepted the offer and that leaves Napa CJDR with a franchise to sell without a location.

Granted it's possible the landlord will allow the next dealer to negotiate another lease agreement but it's also possible the landlord has other plans for the real estate and the next dealer will be left with trying to find a new location.

I know the Bankruptcy Court is working in the best interest of the creditors but I wonder how much the Blue Sky value of the CJDR franchises has fallen now that there's uncertainly regarding the real estate.

While I'm no expert I get the impression that land values in that market are climbing and it might be a challenge for the next dealer to find a location that doesn't create a whole new set of problems.

It will be interesting to watch this transaction as it moves forward.