The owner of several Salt Lake car dealerships says he has resolved a dispute with Ford Motor Credit Co. that led to the filing of a $7 million suit against him in federal district court last week.
Stephen Wade told the Deseret News Thursday that his car dealerships had fallen behind on some of their payments to Ford Motor Credit Company. "We weren't paying a loan from them off as fast as they wanted and we had a shortfall."That shortfall prompted Ford to file a suit against Wade in U.S. District Court, demanding that loans it made to Wade's Ford, Daihatsu, Mitsubishi, Jaguar and Volvo dealerships be paid immediately.
The loans were made to allow the dealerships to purchase cars from the manufacturers.
"I borrowed some money on some real estate that I have and we've resolved the default," Wade said. "We are meeting with them tomorrow at 9:30 a.m. to satisfy their demands."
Despite that resolution, U.S. District Judge David Sam signed a restraining order against Wade Tuesday prohibiting his dealerships from selling cars without immediately paying Ford the wholesale value for those cars. The restraining order also authorized Ford to have an agent at the Wade dealerships to control the Utah State sticker books and ensure that Ford receives its money.
Ford's suit stems from a series of loans made to the Stephen Wade dealerships since December 1987.
According to Ford's suit, the outstanding amounts on those loans range from a high of $4.4 million for the Ford dealership to a low of $264,667 for the Daihatsu dealership, the suit said.
The dealerships agreed to pay back the loans by paying Ford the wholesale price for all vehicles purchased by the loan as the vehicles were sold. However, the suit said Stephen Wade Ford sold 42 vehicles financed by Ford without sending Ford the wholesale proceeds. Stephen Wade Ford owes Ford $557,271 for those 42 cars, the suit said.
The suit claimed Stephen Wade Mitsubishi sold three cars without remitting Ford the $35,634 owed on those cars and the Jaguar dealership sold six cars, failing to send Ford $244,794.
Ford's suit claimed that Wades' dealerships deprived Ford of $837,700 in car sale proceeds.
Hence, the company sought and received the restraining order prohibiting the dealerships from selling cars without promptly remitting the wholesale prices to Ford.
Because the dealerships failed to honor their agreement with Ford, Ford's suit also demanded immediate and full payment of all loans Ford made to the dealerships.