DealersEdge Professional Forums

Can anyone confirm the rumor that N.A.D.A. supposedly received a letter from Daewoo stating that they have no money to pay warranty claims?

[This message has been edited by scotstrong (edited 05-21-2002).]

Scot:
Automotive News is reporting that Daewoo Motor America Inc. has filed for Chapter 11 bankruptcy protection. That is not a good sign!!

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Frank Burrows
Automotive Business Solutions LLC
frank@autobusiness.org

Hi,

Saw an article perhaps in the regular news paper that said a trust fund to pay warranty claims would be set up after the sale closes this July. Don't know what happens between now and then.

s

This is an interesting turn of events and I wonder if warranty claims are considered regular creditors in a bankruptcy action! You would imagine that since this is a part of the business for Daewoo that there would be an escrow account structure for pending claim liabilities just like insurance companies usually have for all claims. I cant imagine that a bankruptcy court would allow warranty claims pending to fall by the wayside as the company is reorganized through the filing process. Definitely a scary scenario for any Daewoo dealers out there and sort of reminds me of Yugo , which my dealer had several stores of in 80's. Of course Yugo didnt pay much anyway for their claims lol.

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Alan The Warranty Guy