Chrysler, taxman owed almost $19M in St. John's dealership collapse
Last Updated: Tuesday, January 27, 2009 | 11:21 AM NT
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Tom Woodford Ltd. was pushed into receivership last Friday. (CBC)A St. John's car dealership that was pushed into receivership last week owes Chrysler Canada and the federal government almost $19 million, court documents show.
Tom Woodford Ltd. shut its doors on Friday, closing its flagship Chrysler lot on Kenmount Road — a fixture in the city since the 1960s — as well as a related Mercedes-Benz dealership on Topsail Road.
Chrysler Financial Services, in documents filed with Newfoundland Supreme Court, says Tom Woodford Ltd. owes $12,150,292.32.
The documents were filed Monday in bankruptcy proceedings that Chrysler Canada launched to reclaim those debts.
The debt comes over unsold inventory. Chrysler owns the vehicles on the company's lot. Tom Woodford Ltd. was supposed to pay about $200 per month in interest on each unsold car.
When Tom Woodford Ltd. did not make payments for November and December, Chrysler called in creditors.
The problems of Tom Woodford Ltd. do not end there. Federal Court documents show that the company was cited in an Ottawa courtroom on Dec. 23 as owing $6,658,121.80 in federal excise tax, plus interest that has been accumulating since mid-December.
The federal debt relates to unpaid goods and services tax involving cars sold to a related Hertz rental franchise.
Hertz Canada, meanwhile, is speaking with other rental agencies around Newfoundland and Labrador to ensure that consumers have access to rental vehicles.
It is not yet clear which creditor — the federal government or Chrysler Financial Services — will have first claim on any funds from what's left of Tom Woodford Ltd. That argument may need to be settled in court.
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