American Suzuki Motor Corp., the bankrupt U.S. distributor of Suzuki cars and motorcycles, won support from 97 percent of its auto dealers to shut down new-car sales while continuing warranty work for existing customers.
Suzuki's parent company, Suzuki Motor Corp., had asked its automobile dealers to voluntarily cancel their existing franchise agreements in exchange for half of what they are owed immediately and the rest through the normal bankruptcy process, Suzuki said in court papers filed Tuesday night in U.S. Bankruptcy Court in Santa Ana, California.
Canceling the contracts means the dealers will be owed about $42 million, according to court papers. The dealers who accepted the offer will be repaid everything they are owed, which is rare in bankruptcy court, M. Freddie Reiss, American Suzuki's chief restructuring officer, said in an interview.