Hyundai Capital America is suing Cortlandt Manor, N.Y.-based Picon Auto on the grounds that the now-defunct dealership allegedly sold six Kia vehicles and failed to pay the captive. HCA claims that the dealer has eight additional Kia vehicles — that were transferred to a Milton, N.Y.-based Chrysler dealership — that it intends to sell.
“Because Picon Auto is in possession of both title to the vehicles and the vehicles themselves, Plaintiff has no security that it will be paid upon disposition of the vehicles,” according to documents filed in Westchester County Court.
Picon Auto has a working capital loan agreement of $375,000 and an inventory loan and security agreement of $1.5 million with HCA. The Irvine, Calif.-based lender first sought payment of $1.9 million in unpaid principal and interest back in December 2018 when the dealership shuttered its operations. HCA claims the payment was never received.
In addition to the outstanding principal and accrued interest on the two loan agreements, HCA seeks compensatory damages in the amount of $380,000 and wishes to repossess the remaining eight vehicles, according to court filings. A June 27 temporary restraining order bars Picon Auto from removing the vehicles from the state of New York. Any proceeds from the sale of the vehicles are to be put in a separate trust, according to the order.
A hearing is scheduled in the Westchester Supreme Court on July 19.
