BRISTOL — The Stephen auto dealership in Bristol is seeking to sell its shuttered Toyota franchise after being sued for allegedly selling vehicles without paying loans that financed the inventory, according to a federal court filing.
Toyota Motor Credit Corp. contends that an audit at the dealership’s Farmington Avenue lot on March 27 showed 46 vehicles with a total value of $1.4 million were unaccounted for, according to the lawsuit. Subsequently, three more vehicles with a total value “in excess of $75,000” could not be found, the complaint says.
On March 30, Toyota sent a letter demanding that the dealership, along with its principal, Stephen J. Barberino Jr., and trustees pay all the dealership’s obligations under financing agreements, a total of about $5 million that included vehicles that were “sold out of trust,” a wholesale loan and a working capital loan, the suit says.
The latest filing by Stephen, dated June 4, says the dealership has sought approval from Toyota Motor Sales Inc. to sell the franchise. Stephen Cadillac GMC intends to pay Toyota Motor Credit Corp. in full from proceeds of the sale, expected to close by June 30, according to the court filing. The parties already have agreed to help resolve TMCC’s claims through the sale of dealership vehicles that are “subject to TMCC’s liens and security interests,” according to court filings.
“Those sales have brought down considerably the balance that TMCC is seeking to be paid,” Stephen’s attorney, Richard S. Order, wrote in the latest filing.
In light of the potential settlement, the defendant has asked the court for a stay of all actions in the case through June 30
“Such a stay will enable the defendants to focus their resources on settlement rather than on litigation,” the court filing says.
Neither Barberino nor lawyers for the plaintiff or defendant could be reached immediately Tuesday.
