A shuttered Englewood auto body shop trapped in the middle of a fight over redevelopment filed for bankruptcy last week to stem foreclosure.
The 76-year-old Sam’s Automotive, which closed in November but still owns its real estate, filed for Chapter 11 last week after a lender initiated foreclosure proceedings earlier in the month.
The shop reported it owes $3.96 million to 12 creditors, according to filings. Chapter 11 bankruptcy allows a business to restructure and keep operating while paying creditors over time.
Sam’s Automotive owner Michael Chavez agreed in June 2021 to sell its property at 1314 W. Oxford Ave. to Texas-based apartment developer Embrey Partners, according to bankruptcy court documents. Sam’s Automotive has owned and operated the site since the 1960s, when Chavez’s father and shop founder purchased it.
Embrey wants to build 361 apartment units and 34 townhomes on the parcel and two neighboring ones, according to bankruptcy documents, but has faced pushback from Englewood citizens who feel the city is overrun with large housing projects.
Rezoning for the site was initially approved in April, but neighbors filed a petition against it in May, according to city records. Although initially deemed sufficient, the developers challenged the petition and won in July. Neighbors responded by challenging the ruling again.
As a result, the purchase of the Sam’s real estate has been “postponed,” the business said in court filings.
Foreclosure documents show Sam’s received a $2.8 million loan from Kresher Capital in September 2022. The Florida-based group claimed Sam’s hasn’t made payments on the loan, and started foreclosure proceedings Aug. 11. The bankruptcy filing has paused those proceedings.
The bankruptcy filings indicate the majority of Sam’s debt, $3.1 million, is owed to Kresher Capital. Other creditors include automotive equipment distributor FinishMaster Inc. (owed $136,878), the Small Business Administration (owed $139,766) and the Arapahoe County Treasurer (owed $99,790).
Sam’s Automotive listed $13.96 million in assets, the bulk of which is accounted for by its Englewood property. Filings indicate the shop’s revenue decreased nearly 50 percent from 2021 to 2022, from $1.67 million to $820,930.
Like many other small businesses, Sam’s Automotive struggled during the pandemic and lost 30 employees, according to bankruptcy filings. After the remaining employees learned of the potential property sale last year, another 15 quit, leaving the shop with only 18 employees and prompting it to close.
Some of the former employees went on to start Highlands Ranch-based Leo’s Auto Body to “carry on the legacy of Sam’s Automotive,” according to the former’s website.
Aaron A. Garber with Wadsworth Garber Warner Conrardy P.C. is representing the company in bankruptcy proceedings. He did not respond to requests for comment. Embrey Partners and Kresher Capital also did not respond.