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Flooring Loans

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In In re Haw. Motorsports, No. 20-10006-BPH, 2020 Bankr. LEXIS 3428 (Bankr. D. Mont. Dec. 7, 2020), the Bankruptcy Court found that AHFC did not own the retailer’s collateral, but retained an unperfected security interest pursuant to a Wholesale Financing Agreement. In its Motion and accompanying Brief, Honda asserts that stay relief is appropriate because Debtor is in possession of inventory… Read More

In Nbt Bank Na, No. 528759, 2020 N.Y. App. Div. LEXIS 2382, at *3-4 (App. Div. 3rd Dept. Apr. 16, 2020), the N.Y. Appellate Division held that a floorplan lender properly debited a dealer's dealer reserve. Upon our review of the record, we find that a fair interpretation of the evidence supports Supreme Court's determination that the "dealer reserve account… Read More

In In re Ferreira, No. 18-5264, 2019 Bankr. LEXIS 3342, at *6-8 (Bankr. N.D. Ga. Oct. 24, 2019), the Bankruptcy Court found no fiduciary duty between a floorplan lender and dealer. A number of courts have considered whether contracts in a floor planning relationship create such a technical trust. As the bankruptcy court explained in VW Credit, Inc. v. Salim… Read More

In Swl v. Nextgear Capital, No. 18A-CC-2955, 2019 Ind. App. LEXIS 387, at *14-19 (Ct. App. Aug. 28, 2019), the Court of Appeals held that the trial court should not have granted summary judgment to a floorplan lender against the dealer on the dealer's promissory estoppel claim. Dealer also asserts that the trial court erred when it entered summary judgment… Read More

In Wester Americredit Fin. Servs. v. Adams Motor Co., No. C18-4067-LTS, 2019 U.S. Dist. LEXIS 141889, at *2-5 (N.D. Iowa Aug. 20, 2019), the District Court threw out counter-claims filed against a floorplan lender.  The facts were not atypical: GM Financial acted as AMC's floorplan lender and entered into a term loan and revolving line of credit with AMC on… Read More

In Auto. Fin. Corp. v. Nunez (In re Nunez), Nos. 17-33845-hdh7, 18-03004, 2019 Bankr. LEXIS 824 (Bankr. N.D. Tex. Mar. 15, 2019), Judge Hale denied a Floorplan lender’s non-dischargeability claim. The Plaintiff alleges that the Defendant committed fraud in securing advances from the Plaintiff and by transferring the Secured Vehicles without being paid in full. The Plaintiff also alleges the… Read More

In Red Barn Motors, Inc. v. Nextgear Capital, Inc., No. 18-1409, 2019 U.S. App. LEXIS 4303 (7th Cir. Feb. 13, 2019), the Court of Appeals for the Seventh Circuit remanded for further proceedings the District Court’s de-certification of a class action against a Floorplan Lender.  We previously reported on the District Court’s opinion here:  https://www.severson.com/consumer-finance/district-court-ind-says-floorplan-lender-hoisted-car-dealer-class-representative-petard-floorpan-agreement-ambiguous-individualized-proof-intent-intrinsic-evidence-req/ The facts were as follows: The… Read More

In U.S. Bank Equipment Finance v. J.W. Jones Company, LLC., et. al.,  2018 WL 5312905, at *5–6 (S.D.Ind., 2018), in granting summary judgment to a floorplan lender on its contract/replevin claim, the District Court also found that the borrower owed a fiduciary duty to the floorplan lender due to the trust-relationship. The language of the Agreement meets the high bar… Read More

In In re Nissan Litigation, 17-CV-729 (KBF) 2018 WL 2113228 (S.D.N.Y.  May 8, 2018), Judge Forrest granted summary judgment to an auto finance company in a floorplan dispute.  Judge Forrest first described “sales out of trust”. In order to keep inventory in their dealerships, car dealers typically enter into Floor Plan Financing agreements with the captive finance arms of the manufacturers—in this… Read More

In Red Barn Motors, Inc. v. NextGear Capital, Inc. f/k/a Dealer Services Corporation, 2018 WL 397231, at *1 (S.D.Ind., 2018), the District Court granted a Motion for Reconsideration Granting Class Certification, and decided to decertify a class action filed on behalf of all used car dealers entering into floorplan agreements with a floorplan lender. The facts were as follows: The Plaintiffs… Read More

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