Lawyers for Rea Keech Buick, which was shut down last week amid charges that it defrauded its lender, will argue in court today that the dealership be allowed to reopen and that its confiscated property be returned.
Sheriff's deputies impounded more than 140 vehicles and ordered banks to freeze the dealership's accounts pending a decision on a $3.5 million lawsuit brought by Pittsburgh-based Mellon Bank last month. About 50 Keech employees are out of work as a result.
Mellon claims that the dealership falsified records to avoid pay
ing on $2.75 million in debt.
But the dealer argues that Mellon's "shotgun approach" seizure before a court rules on the matter is illegal, in part because Keech received no notification and chance fora hearing, court papers said.
The company's owner, Rea Keech Jr.,declined to comment on the case Friday, and could not be reached yesterday.
Bank officers spent two days at the dealership last week taking inventory and collecting records in what Sheriff Michael A. Chiuchiolo called the largest such seizure in the county.
"Everything's really gone smoothly considering the magni
tude of the operation," said. Sgt. Rodney E. Stem of the Sheriff's Office. He estimated that at least a dozen customers had recovered their cars from Keech since last Wednesday.
Deputies continued yesterday to recover cars stored at remote locations, which is a normal practice for auto dealers, said Stem. He said sheriff's deputies and bank officers will be atthe dealership today between 1 and 3 p.m. to give customers another chance to settle unfinished business.
Customers came to the dealership Monday afternoon to settle business, including towing or drivingaway automobiles that were stranded in service bays when Keech's locks were changed.
"There were a lot of people there to pick up their cars, there were a lot of mechanics there to pick up their tools," said William Cookson, an assistant state's attorney who picked up hisfather's car.
Mellon financed Keech's auto sales, allowing General Motors to withdraw money from a $3 million line of credit whenever it shipped cars to the dealership. Keech was to repay the money as itsold the cars.
In its suit, Mellon accuses Keech of selling about70 cars, bought with $1.2 million in advances from the bank, withoutforwarding the proceeds to the bank.The bank also charges that Keechor his daughter, Leslie, manager of the dealership, showed a loan officer false contracts of sale or promissory notes for 31 cars that actually were sold to other auto dealers for cash. Those contracts havesince been concealed or destroyed, the bank alleges.
In papers filed last week, Keech's lawyer argued that Keech should be allowed to reopen his business.
The motion cites several federal and state court decisions reversing similar seizures in which defendants receivedno prior notice, and plaintiffs had no evidence that their claims could not be paid.