Tunex International, a Utah company with car repair outlets through the Western United States, has filed a Chapter 11 bankruptcy petition, seeking to reorganize under the supervision of the U.S. Bankruptcy Court.
The company's 30 outlets - including eight along the Wasatch Front - will remain open while the company tries to reorganize.This is the second time Tunex has sought reorganization. The company, organized in 1974, filed for Chapter 11 in 1979. The first reorganization plan was confirmed by U.S. Bankruptcy Court and completed, said Duane H. Gillman, attorney for the company.
"This proceeding is an entirely separate proceeding with different creditors," Gillman said. The company's chief creditor is Autospa. Tunex has been negotiating a merger with Autospa. As part of the negotiation, Autospa advanced $475,000 to Tunex. The negotiations hit a snag and now the money must be paid back, Gillman said.
Tunex also owes $123,000 to the Internal Revenue Service and tens of thousands of dollars to several trade creditors.
Tunex may resolve its problems through sale or merger, Gillman said.
Tunex began having financial problems several months ago when it attempted to generate investment capital for groups interested in buying eight Tunex franchises by forming limited partnerships.
The partnerships couldn't generate the capital, so those interested in buying the franchises couldn't get the money to do so, Gillman said. Meanwhile, Tunex had already gone ahead and built the eight outlets.
"This resulted in substantial cash flow problems for Tunex," said president Robert D. McDonald in a press release announcing the Chapter 11.