Bill Heard Chevy chain enters bankruptcy filing

Bill Heard Enterprises has filed for Chapter 11 bankruptcy protection, a casualty of an easy-credit economy that relied on a shaky consumer base to keep sales churning.

The filing Sunday in U.S. Bankruptcy Court for the Northern District of Alabama in Decatur, Ala., lists the Columbus-based automobile dealership chain with between 1,000 and 5,000 creditors —- including the Georgia Department of Revenue and Georgia Power —- and total debt between $500 million and $1 billion. The filing, which also lists total assets between $500 million and $1 billion, comes nearly a week after Bill Heard shuttered all of its dealerships, leaving 2,700 jobless.

It also follows the filing of a federal class-action lawsuit Friday in Alabama by two of the auto dealership’s employees in Huntsville.

They allege the company failed to provide proper notice, did not pay its employees and did not follow the rules under the federal Worker Adjustment and Retraining Notification Act.

A Bill Heard spokesman said the company would have no comment beyond a statement it issued Monday confirming the bankruptcy.

The company’s Birmingham-based law firm did not immediately return telephone calls seeking comment Monday.

Bill Heard’s demise underscores the problems that many companies —- particularly those involved in consumer financing —- now find themselves entangled in after years of targeting people with splotchy credit.

Indeed, Bill Heard, which had four dealerships in metro Atlanta and one in Columbus and operated in seven states, grew into the world’s largest Chevrolet dealer with more than $2 billion in sales a year. Much of its recent growth was based on aggressively marketing autos to those with blemished credit.

The company said in a statement last week that the combination of rising fuel prices, a slowdown in car sales and problems in the banking sector piled up to “create a business environment in which the company simply did not have the resources needed to continue to operate.”

It closed its Scottsdale, Ariz., dealership on Sept. 12.

Though it blamed the current economic turmoil, the company’s financial and legal problems have been mounting for several years.

The most recent example was GMAC Financial Services’ decision last month to discontinue credit for new inventory for some of Bill Heard’s dealerships. It cited concerns about financial losses at the company.

The company also has had several battles with the Governor’s Office of Consumer Affairs, which has been investigating it since 2003 and accused the company in a lawsuit last year of deceptive marketing practices.

Bill Cloud, the consumer affairs department’s spokesman, said Monday the agency is in a “wait and see” mode with its lawsuit until the bankruptcy case is resolved.

“When something goes into federal court, it trumps everything else,” Cloud said. Though a Chapter 11 filing is designed to allow a company to reorganize itself, Cloud, who said the agency’s deputy director is in Alabama following the proceedings in bankruptcy court, expressed concern about what would emerge after bankruptcy.

“They filed a Chapter 11, not a Chapter 7 [which is a complete liquidation], but in the pleadings themselves they said they were going through an ‘orderly liquidation of the company,’ ” Cloud said. “Right now, I’m just in a wait-and-see situation and thinking the game may be over.”