Court Ruling Ends Tate’s Auto Comeback Bid

PHOENIX — Tate’s Auto Group’s four Arizona and New Mexico new-car dealerships have officially closed following a federal bankruptcy court ruling that allowed two captive finance companies to reclaim unsold new-vehicle inventory.

Federal bankruptcy Judge Brenda Moody Whinery ruled in favor of Ford Motor Credit and Nissan Motor Acceptance Corp. in late April, lifting a stay that was key to ownership’s attempt to keep the business afloat through a planned reorganization and eventual sale.

The group was founded in 1977 and last owned by group manager Richard Berry and his mother, Linda Tate. They operated Ford, Lincoln, Buick, GMC, Chrysler, Dodge, Jeep, Ram, and Nissan franchises from rooftops in Winslow, Show Low, and Holbrook, Ariz., and Gallup, N.M.

“We had hoped for an opportunity to reorganize our company, protect our business and employees by either bringing forward an investment group or buyer, so in the end we could keep the employees in their jobs,” Berry wrote in a statement. “Unfortunately, the bankruptcy judge sided with Ford Credit and moved to close our business effective essentially immediately. … None of us were prepared for this outcome. Instead of giving us 60 days to bring forward buyers, yesterday, we laid off all of our employees. After serving the White Mountains for over 40 years, it’s a sad end to an incredible business run.”

The bankruptcy stems from $40 million in claims against Tate’s Auto by various finance sources. Ford and Nissan’s captives both claimed the group sold vehicles out of trust, among other contractual violations.

Adding to Tate’s woes, the Federal Trade Commission is weighing charges based on claims brought by some Native American customers, claiming deceptive trade and advertising practices.

Berry had already planned to sell the stores, having retained the services of Southern California’s GlassRatner Advisory & Capital Group. The buy/sell firm reported the group sold 1,155 new vehicles last year, a 59% decline since 2014, at a loss of $7.2 million.