Coast Automotive Group Inc. et al., a group of companies which operate two franchised Chrysler, Dodge, Jeep, and RAM dealerships in North Vancouver, British Columbia and Drayton Valley, Alberta, obtained CCAA protection on July 16 on application by senior secured creditor BMO, owed approximately $36.2 million.

The companies employ approximately 72 individuals across their two dealerships, including 19 unionized employees at the North Vancouver location.

Coast Automotive acquired the dealerships (and the real property for the Alberta dealership) in 2023 from Foundation Automotive Corp., which provided a $4 million vendor takeback mortgage. Coast Automotive’s two owners had reportedly pledged to collectively inject $4 million in shareholder loans to support operations, but only ever injected $2.75 million, resulting in a shortfall from the outset.

The companies have faced several operational challenges since the acquisition, impacting cash-flows and their ability to meet obligations as they become due. These include ownership’s limited prior automotive retail experience, high inventory levels combined with low consumer demand, inventory management issues, underperforming service departments, and a failed attempt to export used vehicles to the US in Q4 2023.

BDO is the monitor.

Counsel is Miller Thomson for BMO, Blakes for the monitor, DLA Piper for the companies, Robertson for Deerfoot Atria Partners, and Stikeman Elliott for Foundation Auto Drayton Valley et al.