Trouble in Paradise – Palm Beach Morgan Dealer in Hot Water
Photo Courtesy www.bizjournals.com
[Reports in the press indicate that there are problems with the South Florida Morgan dealer Chariots of Palm Beach. The truth of the matter has not yet been determined, and I certainly don’t want to jump to conclusions. This is something that will eventually be sorted out by the courts. As always be careful and ‘Caveat Emptor’. Mark. ]
Luxury car dealership in Palm Beach files Chapter 11 with over $10M in debt (https://www.bizjournals.com)
Luxury car dealer Chariots of Palm Beach filed Chapter 11 reorganization and asked the court to appoint a chief restructuring officer.
The West Palm Beach-based company filed a petition in U.S. Bankruptcy Court on July 27 listing assets of $1 million to $10 million and liabilities of $10 million to $50 million. An affiliated company, H&S Inc., also filed Chapter 11 and will have its case managed together with Chariots of Palm Beach.
The dealership at 2400 N. Florida Mango Road sells pre-owned BWM, Mercedes-Benz, Porsche, Rolls-Royce and other luxury vehicles. Its showroom has room for 80 cars, according to its website. The company also rents luxury cars.
The debtor has yet to provide a detailed list of its assets. Attorney Steven S. Newburgh, who represents the debtor in Chapter 11, declined comment.
County records show that Chariots of Palm Beach owns a 0.7-acre lot with a 14,910-square-foot auto sales building. It was last valued at $1.33 million by the Palm Beach County Property Appraiser.
The largest unsecured creditors listed in the bankruptcy petition were Alan and Susan Gilison in Sands Point, New York with a $756,000 claim and Robert Berens, also from Sands Point, with a $284,833 claim.
The company has yet to disclose its secured creditors. However, a county record search shows Chariots of Palm Beach signed mortgages of $500,000 in October 2016 with North Florida Mango Credit and $1.5 million in April 2016 with Palm Beach Gardens-based Anchor Commercial Bank. Neither of those lenders have pending litigation against Chariots of Palm Beach in Palm Beach County Circuit Court.
[and another . . .]
Did exotic car dealer scam ex-congressman Mark Foley? (www.miamiherald.com)?
Former U.S. Congressman Mark Foley says he’s been ripped off by one of South Florida’s highest-profile exotic car dealers in what he claims is a pyramid scheme as la Bernie Madoff.
The Republican ex-congressman, who represented a Palm Beach to Fort Pierce district for five terms before he resigned his seat after sexting with underage male congressional pages, is among dozens of expensive-car owners who may have been taken for a ride by the owner of a bankrupt car dealership that specializes in used Rolls-Royces, Bentleys, Aston Martins, Ferraris and other exotic wheels.
The West Palm Beach-based Chariots of Palm Beach, according to federal court papers, could leave investors, banks and buyers as much as $50 million in the hole.
“We’re not dealing with billions like Bernie Madoff,” Foley said, referring to the former Wall Street investor now serving 150 years in a federal penitentiary after bilking investors out of $13 billion. “But I am the victim of a classic pyramid scheme.”
Until it closed recently, Chariots of Palm Beach was a fancy consignment store where multi-millionaires dropped off cars they no longer wanted. The dealership then tried to sell those cars for a commission.
Over the past few months, according to the bankruptcy documents, Chariots of Palm Beach founder Hugh Bate is believed to have used the titles to cars he didn’t own to secure millions in loans he can’t pay back.
“It’s a real mess,” says Foley. “A federal court might have to determine the ownership of hundreds of cars.”
Foley explains that on Aug. 10 he was coincidentally at the Chariots of Palm Beach showroom when a shopper decided to buy the silver-colored Porsche Macan Foley wanted to get rid of.
Foley had bought it last year for $68,000 cash, and took it to the dealership in May. The 63-year-old ex-pol says the man paid the dealership $57,886 for his car before peeling off as he waved bye-bye.
Two months later, Foley is still waiting for the dealership to pay him, and he is worried he might never be shown the money.
“I feel like I’d been carjacked,” Foley now says, “except that nobody stuck a gun in a face and yelled at me to get out of my car.”
Foley says the buyer of his car, a Broward County developer whose name he forgot, did nothing wrong.
“He probably thinks he now owns a nice Porsche. It’s the dealership that did God knows what with my title,” Foley said, adding he didn’t personally sign over the title to the new owner.
Which begs the question: Why would a savvy fancy car lover like Foley go to a consignment store instead of an official Porsche dealer?
“Chariots had an extraordinary reputation,” Foley said, pointing out that the dealership was the area’s go-to place for rare exotic wheels. “They were able to get a better sales price for used cars than the official dealerships.”
And now, the ownership status of dozens of consigned Aston Martins, Bentley Azures and Ferrari Spiders, some of them worth in excess of $400,000, are in limbo.
The list of original owners included in the bankruptcy reads like a who’s who of East Coast business and society, including: New York real estate company owner Stephen Haymes; Palm Beach philanthropist Ross Meltzer, who brought a convertible Bentley to Chariots of Palm Beach months ago; Wolf Von Falkenberg, who’s famous in Palm Beach for his marriage to Standard Oil heiress Anne Terry Pierce McBride while she was on her deathbed; and Washington, D.C., developer Albert Van Metre Jr.
Former Assistant Palm Beach Gardens Police Chief Rick Facchine, whose BMW M4 is gathering dust in the shuttered up showroom, is also among the alleged victims. His car wasn’t sold, but he can’t get it back because the title may have been used by Bate to get a lender to loan him money.
Facchine declined comment. Foley says he and others have filed criminal complaints with West Palm Beach Police and the FBI. No criminal charges have been filed.
I can’t believe this story! The same exact thing almost happened to us with our 1st Morgan when we lived in Madison, WI. We stored it during winter at one of the largest Corvette dealers in our part of Wisconsin. One day, we received a call from our tax guy / friend who told us to go over asap and get our car out and don’t ask any questions. We did and the next day the Feds, etc. showed up and with much fanfare closed the place down. To say the least, it was a major news story as the owner was promenant in the area.
An interesting article. But it makes sad reading.