Longtime local used-car dealer Aufmuth Inc. has filed for Chapter 11 bankruptcy reorganization.
Aufmuth's bankruptcy attorney, Eric Slocum Sparks, said the filing was prompted to avoid legal action by a lender, but the company is finalizing new financing that should allow the company to regroup.
Under Chapter 11, legal actions against a debtor are halted pending approval of a plan to repay creditors.
The company continues to operate and plans to do so through the bankruptcy, Sparks said. The 38-year-old company operates Aufmuth Motors at 3821 W. Costco Drive and 5955 W. Arizona Pavilions Drive in Marana, employing 24 workers.
Aufmuth's troubles began when it was located at West Prince Road and Interstate 10, when the interchange project there began in 2011, limiting customer access and hurting sales, Sparks said.
Aufmuth moved, but more recently, a change in the company's auto financing arrangement shortened the company's financing period for cars bought through an auction, pinching off a major source of inventory, he said.
Though the company has not filed detailed debt schedules, Sparks said the company's assets and debts are about even at around $700,000.
The company is arranging new sources of vehicles, like rental-car returns, Sparks said, adding that he expects a reorganization plan to be in place in a matter of weeks.
Contact Assistant Business Editor David Wichner at dwichner@azstarnet.com or 573-4181.
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