Englewood Cliffs, N.J.-based Trinity Auto filed for Chapter 11 bankruptcy Jan. 2 due to a lack of funding, rising costs and reduced consumer demand.
Trinity Auto, which does business as Trinity Cadillac, filed for Chapter 11 protection with the U.S. Bankruptcy Court for the District of New Jersey, court documents show. Trinity Auto intends to operate the service department until the dealership can be sold.
The dealership has estimated assets between $1 million and $10 million, liabilities between $10 million and $50 million and between 50 and 99 creditors, according to the bankruptcy filing. Creditors described in the filing as having some of the largest unsecured claims and are not insiders include GM Financial, which provides consumer financing for vehicles and floorplan financing for General Motors dealers, and Bank of America.
Other creditors in that list include data and service providers such as TrueCar, VinSolutions and vAuto, Poughkeepsie, N.Y.-based Hudson Cadillac, consultants and the State of New Jersey Division of Taxation, according to the filing. Investment firm Galinn Fund also holds business debt. The filing did not specify what each creditors’ claim included.
Bank of America declined to comment on the case today. Neither Trinity Auto nor any other creditors responded to requests for comment by publication time.
‘Lack of funding’
Trinity “experienced a direct and compounding adverse effect on its liquidity and operating performance” amid slowed consumer demand, high financing costs, inflationary pressures and credit availability challenges, according to a separate motion filed with the same court Jan. 2. The motion seeks to allow Trinity to use its cash collateral to continue business operations while in Chapter 11.
The dealership is looking to use cash collateral subject to liens from Fulton Bank and Dealer Capital Group, according to the filing. Fulton in February 2023 provided Trinity with a $12.5 million floorplan line of credit, which has a balance of about $3.9 million.
Fulton financed Trinity Auto’s purchase of vehicles from General Motors and provided the manufacturer with the option to repurchase vehicles repossessed from the dealer, according to a February 2023 agreement included in court documents.
In October 2024, Fulton sued Trinity Auto for about $6 million alleging that the dealership had defaulted on its loan agreements and did not pay Fulton for a “significant number of vehicle sales,” according to a filing with the U.S. District Court for the District of New Jersey. The case was settled on May 7, 2025, for an undisclosed amount and dismissed in June 2025, according to court documents.
Dealer Capital provided Trinity with a $2.5 million three-year loan in October 2025 with a maturity date of Dec. 15, 2029, according to the court filing. The loan has a full balance.
Trinity also held merchant capital advance loans with several lenders from 2021 through 2025, according to the filing.
Without using its cash collateral, Trinity Auto would not be able to cover the costs of operating during bankruptcy proceeding, according to court documents.
The court granted on Jan. 2 Trinity’s use of the cash collateral on an interim basis and preserved the rights of Fulton Bank and Dealer Capital Group to pursue applicable interest, fees, charges and costs, according to the filing. Trinity expects to generate sufficient receivables to protect Fulton’s and Dealer Capital’s interests while using cash collateral to fund operations.
Fulton objection
However, on Jan. 6, Fulton filed an objection to Trinity’s use of cash collateral tied to funds from the bank, according to court documents. Fulton said its claim against Trinity Auto exceeds $4.2 million, including $3.4 million of principal plus interest and costs.
Fulton submitted a counter proposal to Trinity requesting:
- All remaining vehicles are sold and proceeds from those sales are paid to Fulton;
- The cost of parts used in servicing vehicles is paid to Fulton; and
- Clarity be provided as to necessary payments during the interim period in which Trinity can use the cash collateral.
The bank also submitted questions to Trinity regarding how much it has in cash and whether assets such as automobile parts and office furniture would be going to the dealership’s buyer, according to the filing.
Fulton is also seeking answers as to where vehicles valued at more than $1 million are located and the status of loan payments that should have been received.
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