General Motors has filed a $37 million lawsuit against Kinley Chevrolet in Pennsylvania.
The automaker claims the dealership sold hundreds of vehicles without repaying the loans used to finance them.
The suit also names dealership principal Steven Kohlon and its parent company, Lonely Co. Ventures, as defendants in the case.
What Happened
GM Financial has accused Kinley Chevrolet of selling vehicles “out of trust.”
This practice involves using loaned funds to purchase vehicles and then selling them without repaying the lender.
The financial arm of General Motors is seeking damages and the return of hundreds of vehicles.
Key Details
- Dealer: Kinley Chevrolet
- Principal: Steven Kohlon
- Parent Company: Lonely Co. Ventures
- Amount Sued For: $37 million
- Allegation: Sold hundreds of financed vehicles without repayment
- Collateral: GM is now repossessing the unpaid inventory
Federal Judge Mitchell Goldberg has authorized GM to seize its collateral and ordered the dealership to surrender keys and related documents.
GM also claims the dealership fell behind on a $1 million-per-week repayment schedule.
Reactions or Statements
Kinley Chevrolet contends that the dispute is based on financial misunderstandings.
The dealership argues that GM is miscalculating interest, charging inappropriate fees, and misreporting figures to the IRS.
No public comments have been made by General Motors outside of the legal complaint.
Investigation or What’s Next
GM Financial has begun repossessing the vehicles at issue.
The lawsuit may lead to further audits and potential regulatory scrutiny into the dealership’s financial practices.
Court proceedings will determine whether the alleged misconduct was intentional or a result of miscommunication.
FAQs
What does “out of trust” mean in auto financing?
It refers to when a dealership sells vehicles financed by a lender but fails to repay the loan after the sale.
How much does GM claim it is owed?
GM Financial is seeking $37 million in damages.
Who are the key parties involved in the lawsuit?
Kinley Chevrolet, principal Steven Kohlon, and the holding company Lonely Co. Ventures.
What action has the court taken so far?
Judge Mitchell Goldberg has authorized the repossession of vehicles and demanded full access to dealership records and keys.
What is the dealership’s defense?
Kinley Chevrolet claims the issue is a result of incorrect interest charges and financial miscommunication.
Summary / Final Takeaway
General Motors has taken legal action against a Pennsylvania Chevrolet dealership for allegedly misusing auto financing loans and failing to repay them.
The outcome of this high-profile case could set an example for how automakers handle large-scale dealership defaults moving forward.
