FAIRBANKS (AP) -- A used-car brokerage that owes up to $500,000 to customers, ex-employees and others has filed for Chapter 7 bankruptcy liquidation.
National Car Buyer's Club Inc. of Fairbanks filed the paperwork earlier this month.
Barry Jackson, a bankruptcy lawyer representing the company, said a trustee will sell the family-owned company's assets -- listed at less than $50,000 -- to begin to repay the debts.
The bankruptcy filing states the company owes between $100,000 and $500,000 to 63 creditors, most of them customers. Banks, ex-employees, suppliers and an accountant are also on the creditor list.
The IRS and employees who are owed wages get paid first, Jackson said. Other creditors will likely not get paid any time soon.
''We do not anticipate there will be any such money left over,'' he said.
Jackson said company president Michael Pierce and his family plan to use their own money to repay as many creditors as they can. Pierce's parents and other family members sit on the company's board of directors.
National Car Buyer's Club sold cars that it bought, obtained on credit or accepted as trade-ins.
Fairbanks police started investigating the business last month after some people complained that cars they traded in to Pierce weren't getting their bank loans paid off.
Pierce, 25, acknowledged that his company was undercapitalized and had cash-flow problems as its business grew.
The bankruptcy filing has left several people claiming they have lost thousands of dollars and others wondering whether they truly own the car they purchased.
While some went to police, others have reportedly gone to the club's shut-down University Avenue office carrying baseball bats.
''You hurt somebody for tens of thousands of dollars, they tend to get angry,'' said Dale Rixie, owner of North Star Auto Sales.
Rixie says he is out $2,000 for a truck the brokerage tried selling for him. Car Buyer's turned over the truck to a customer who ultimately refused to pay. The customer also crashed the truck, Rixie said.
Rixie repossessed the truck and got the insurance company to fix it, but he lost money when forced to sell it as rebuilt.
Peninsula Clarion ©2014. All Rights Reserved.