A federal judge issued a temporary restraining order this week against the owner of a recently defunct Laramie car dealership, Snowy Range Dodge, which was sued earlier this year by Nissan for about $6.8 million in unpaid debt.
The temporary restraining order, a type of emergent but temporary injunction, bars the dealership from “encumbering, transferring, spending, removing, or otherwise disposing of, damaging, altering, or impairing, account funds, whether in the form of a check, withdrawal, transfer or otherwise, without the written consent of (Nissan) or until further order of this court.”
The dealership’s owner, JAG Auto, is alleged to have sold Nissan vehicles without paying the car manufacturer for the product.
Nissan’s financing of the car dealership allowed JAG Auto to acquire an inventory of new and used vehicles without pre-paying for them.
In total, Nissan claims it is owed more than $6.8 million from the Laramie company.
Nissan and the car dealership entered into a financing agreement in May 2017, and Nissan then discovered in late 2018 the car dealership “failed to keep its working capital and net cash at or above guidelines” established by Nissan.
After the lawsuit began, the Pierce Street dealership was sold to a Colorado company in July and now operates as Johnson Auto of Laramie.
U.S. District Court Judge Alan Johnson set a hearing for Nov. 6 to determine whether a preliminary injunction should be issued against JAG Auto.
Johnson said JAG Auto’s past sales practices merited a temporary restraining order.
“Were (Nissan) required to give defendant a ‘heads up’ that it intended to seek injunctive relief as to the account funds, this would provide defendant with the opportunity to dissipate those funds, and the likelihood this will happen cannot be ignored when the court considers defendant’s prior actions of selling vehicles without paying (Nissan) its fair share from the sales proceeds coupled with defendant’s apparent intent to transfer those funds to … its counsel despite (Nissan)’s superior contractual right to receive them,” Johnson said.
At a September meeting, JAG Auto’s attorney said the defendant has “a couple hundred thousand” dollars from the dealership’s sale.