NextGear Capital has filed a complaint against a Canadian used-car dealership and its owner, claiming the dealership defaulted on its floorplan payments as a result of an alleged fraud scheme.
Fredericton, New Brunswick-based W&P Auto Sales and its owner Peter Kennedy entered into a floorplan financing agreement with NextGear Capital in March, according to court documents obtained by Auto Finance News. NextGear Capital extended a loan of C$250,000 ($191,112.50) to W&P Auto and the dealership defaulted on its payments over the next five months.
NextGear Capital filed a statement of claim against W&P Auto in August, and the dealership subsequently shuttered its operations. Now, the dealership and its owner are being investigated by the Fredericton Police Force for “significant fraud,” related to the floorplan loan, according to a report by CBC News.
NextGear Capital is demanding W&P Auto shell out C$136,894.78 ($104,649.21) in response to the floorplan defaults. Additionally, NextGear Capital is charging compounding interest on the remaining principal balance at a rate of 4.5% per day from Aug. 2 until the date of judgment, according to the filing.
The date of judgment was not provided, and W&P Auto and NextGear Capital were unavailable for comment by press time.
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