Toyota Dealer Files for Chapter 11 Protection
Toyota of Simi Valley has filed for Chapter 11 bankruptcy protection with a federal court in Santa Barbara.
The dealership still owes $3.6 million to the Toyota Motor Credit Corp., the financing arm of the auto manufacturer, a credit company spokeswoman said Wednesday.
But the move has stalled Toyota’s attempt to recover its assets while the dealership tries to reorganize, the spokeswoman said.
The dealership did not respond Wednesday to phone calls requesting comment.
Two weeks ago, the dealership was under a court order not to sell or remove any cars or auto parts from its 1st Street lot until it resolved the debt, Ventura County Sheriff’s Sgt. Noel Brown said.
The court-ordered “writ of possession,” which assigned sheriff’s deputies to ensure that nothing left the lot, essentially prevented the dealership from doing business.
On Friday, the dealership applied for Chapter 11 in Federal Bankruptcy Court, Brown said.
Under bankruptcy protection, the company will be allowed to operate its business under the oversight of a court-appointed trustee, he said. Over time, the court will attempt to ensure that the dealership’s creditors are paid.
