A Medford company that bills itself as Long Island's top RV dealership is being sued for more than $10 million by two national finance companies that claim the retailer sold vehicles but failed to pass along more than $3 million in payments to the lenders.
Eddy's Long Island RV Center, which sells and rents RVs and has been in business since 1960, has seen most of its inventory seized and its bank accounts frozen.
Executing a court order from federal Judge Joseph Bianco in Central Islip, the Suffolk County sheriff's office seized about 140 motor homes and trailers starting on Monday morning, said Capt. Ted Sarian, the commanding officer of the sheriff's civil bureau. The seizure was completed Tuesday.
The battle began in court on May 30, when GE Commercial Distribution Finance Corp., a unit of Fairfield, Conn.-based General Electric Co., sued Eddy's in U.S. District Court. GE said the company defaulted on its payment agreement when it sold about $2.3 million worth of vehicles without sending payments to the lender. GE is demanding that Eddy's pay its $6.6-million loan balance.
Textron Financial Corp., a Rhode Island company, filed suit on June 9, claiming Eddy's owes it more than $4 million after it defaulted on its loan terms by selling $1.5 million of vehicles and not paying for them.
Thomas J. Gouldsbury, 50, an owner of Eddy's for the last nine years, said his company is open for business and "there will be no bankruptcy filing at all. . . . We are in the process of reorganization."
Gouldsbury said his company's financial troubles stem from a declining economy and in order to right itself, some of the establishment's 50 employees may have to be fired and some of the lot's 13 acres will be sold.
"It was not necessary that the sheriff was here due to the fact that we gave a voluntary surrender," said Gouldsbury. "It was a total waste of resources for the Suffolk County Sheriff's Department."
RV dealers normally finance their inventory by paying lending institutions a monthly inventory cost and reimbursing the lender each time a vehicle sells at retail, said Bill Baker, spokesman for the Recreational Vehicle Industry Association in Reston, Va.
GE Commercial also claims that when it inspected Eddy's lot to confirm the sales, the dealership concealed them by allowing purchasers to store their vehicles on site. GE did not return telephone calls seeking comment, and Textron declined to comment.
The lawyer for Eddy's and owners Thomas and Deborah Gouldsbury declined to comment on the lawsuit, but agreed with the owner that the business has suffered because of the economy.
"The combination of very high fuel prices and a shrinking economy have impacted significantly on the RV market," said Eddy's attorney, John Gentile of Bellavia Gentile & Associates in Mineola.
The RV association said trailer and motor home sales through May are down 14 percent compared with last year. Gentile said the freezing of Eddy's bank accounts has "resulted in the complete destruction of the business."
But he said he was hopeful that he could work out a deal with the plaintiffs: "It is our hope that we are going to be able to work out a resolution that will allow the business to continue to serve the Long Island community."
Wednesday, Eddy's, noted for its massive RV lot, was nearly empty, except for two dozen vehicles mostly in its rental lot.
The seized vehicles were taken to three privately owned locations in the towns of Islip, Brookhaven and Smithtown, according to the sheriff's department.
Staff writer Tom Incantalupo contributed to this story.
JJBIRISH wrote: there will be many more stories like this to come...
I bet this practice was wide spread and if the cash isn't there, implosion time...
if you are buying, make sure you learn how to protect yourself, on matter how healthy a dealer looks or says they are...
things can change with=in a few hours...
I'd like to say "Been there, done that." except we still in the middle. Our dealer is in the same situation and our title is pending him paying the manufacturer, only he doesn't have the money to do so.
As for making sure you learn how to protect yourself? After a week of talking to numerous knowledgeable folks, I've come to the conclusion that there is very few ways to protect yourself:
1. Buy a used coach, pay cash and demand the title from the dealer at the time of sale so you the buyer can transfer title yourself.
2. Buy a new coach, pay cash and demand the MSO from the dealer at the time of sale so you the buyer can transfer title yourself.
3. Finance the purchase of the coach so that you have a minimum amount of YOUR cash involved. You have the added advantage of having your lender's lawyers involved if the dealer is 'out of trust'.
4. Buy a coach from a private party that you can verify is the legal owner. Go to DMV with the seller and transfer the registration and title.
Steve & C. J.
"Gracie" the Rough Collie & "Bo'sun" the Bichon Frise
JJBIRISH wrote: there will be many more stories like this to come...
I bet this practice was wide spread and if the cash isn't there, implosion time...
if you are buying, make sure you learn how to protect yourself, on matter how healthy a dealer looks or says they are...
things can change with=in a few hours...
I'd like to say "Been there, done that." except we still in the middle. Our dealer is in the same situation and our title is pending him paying the manufacturer, only he doesn't have the money to do so.
As for making sure you learn how to protect yourself? After a week of talking to numerous knowledgeable folks, I've come to the conclusion that there is very few ways to protect yourself:
1. Buy a used coach, pay cash and demand the title from the dealer at the time of sale so you the buyer can transfer title yourself.
2. Buy a new coach, pay cash and demand the MSO from the dealer at the time of sale so you the buyer can transfer title yourself.
3. Finance the purchase of the coach so that you have a minimum amount of YOUR cash involved. You have the added advantage of having your lender's lawyers involved if the dealer is 'out of trust'.
4. Buy a coach from a private party that you can verify is the legal owner. Go to DMV with the seller and transfer the registration and title.
Steve
I have followed your case, and wish you the best...
other recent post have problems getting title because they didn't understand terms and details of the contract and the pay off amount came in higher than they expected... to complicate things more their trade had already been sold...
anyway not to get into the details of another's post, you are correct there isn't a lot you can do...
I buy, trade, and take the registration paperwork with me and over night it to the DMV for processing... that way it can't be seized, lost or sat on by the dealer... I know the sales tax has been paid and once the processing is started, that baby is mine...
in this economic climate it is even more important to do what you can... people just don't expect these things to happen, and while they shouldn't, they do... trust me no one else is looking out for you when it happens...
I think this buy now and we will store it for you is wide spread... it allows the dealer to use your and the mfg's money for a period of time...
if audited he better be able to pony up the money... lenders are being squeezed to and will call on more dealers and we will hear more of the same...
I have seen it in the auto industry, and know one guy making payments on two cars (trade and new)... trade sold tax and title never paid by dealer, new car on the lot for service, and twenty-five tow trucks descended on the place towing everything on the lot to a different location...
he finally got his car and title after paying the Taxes a second time... I understand some didn't...
JJBIRISH wrote: I have seen it in the auto industry, and know one guy making payments on two cars (trade and new)... trade sold tax and title never paid by dealer, new car on the lot for service, and twenty-five tow trucks descended on the place towing everything on the lot to a different location...
he finally got his car and title after paying the Taxes a second time... I understand some didn't...
This happened to me. I bought from a dealership in MD in 2004. Apparently "somebody" at the dealership was taking the deposits and not paying taxes and title fees, and taking trade payoffs and not paying off the trade balance. Thankfully I didn't have a trade, those poor folks found out they still legally owned two cars. I had to pay my taxes and fees a second time at the DMV to get my tags, and then file a claim against the bond company.
What made me mad about the whole thing was there was NO arrest that I could ever tell, and the owner of the dealership kept all his money and house, etc. The bond covered a fraction of what was owed, so we all got a fraction of what our claim was. Somebody should have gone to jail over this.
The only thing I've done differently is now I only pay my deposit with a credit card, or I refuse and make them finance 100% of the amount, up to them. I will not give a dealership my cash anymore.
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