SCOTTSDALE, Ariz. -- Four creditors have filed lawsuits against Scottsdale, Ariz., car wash operator Daniel "Danny" Hendon, his business partners and their various companies, claiming a total debt of more than $50 million, reported The Arizona Republic.
Dennis Naughton, attorney for Danny's Family Cos. LLC, said the legal action is part of a "domino effect" that started after one lender, Milwaukee-based M&I Marshall & Ilsley Bank, filed a Maricopa County Superior Court complaint in early February, claiming nonpayment on a $13.8 million business loan.
"[image-nocss] We've been working furiously and in good faith to resolve these issues amicably," Naughton told the newspaper.
Of the roughly 90 businesses in which Hendon is involved, including the Scottsdale-based Danny's Family Cos,, four have filed for Chapter 11 reorganization in U.S. Bankruptcy Court. (Click here for previous CSP Daily News coverage.)
Those bankruptcies stem from the M&I lawsuit, the first of two recent complaints asking the court for emergency action to restrict the defendants from using any existing cash or collateral assets.
The second, larger lawsuit, filed Monday by Dallas-based Comerica Bank, contends Hendon and 19 of his companies defaulted on a $40 million loan, with an outstanding balance of $24.7 million. The complaint alleges that about $3 million of the money Hendon's companies owe Comerica is unaccounted for and that it appears Hendon lent the money to one of more of his other businesses, said the report. Such a loan would violate the agreement with Comerica, the bank said in its complaint.
Naughton said that the story behind the lender complaints is long and complicated, but that Hendon intends to tell his side of it soon. At the moment, the attorney told the Republic, Hendon is more worried about protecting the 2,000 Arizona workers he employs.
"I know M&I got $1.7 billion from TARP, and I don't know how much Comerica got, but we're a little confused about why these lenders would come after Danny's Family Cos. like this," Naughton said.
Bert Roos, a Phoenix attorney representing the three Danny's Family car washes and one convenience store in Bankruptcy Court, told the paper that all four businesses "have good cash flow" and bring in enough revenue to work out an arrangement with creditor M&I.
"I believe Danny's Family car washes are going to be around for a long time," he added.
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