HARRISONBURG — A federal bankruptcy judge approved the sale Monday of longtime Waynesboro car dealership Baugher Chevrolet-Buick to Obaugh Chevrolet-Buick, owned by Staunton auto dealer Charlie Obaugh.
Chip Magee, the Roanoke attorney for the Baugher family, said the sale of real estate and assets could close today and the new dealership on West Main Street could open later this week under its new name.
Magee said the original sale price of $3.3 million was adjusted by $385,000 because of vehicles sold by Baugher since the agreement was made with Obaugh, who owns multiple car dealerships in the area.
Baugher Chevrolet-Buick filed for Chapter 11 bankruptcy protection in August, citing mounting pressure of foreclosure from BB&T Bank, its major creditor.
BB&T had secured the more than $3 million debt it was owed with liens against both Baugher’s assets and dealership real estate.
In addition, Sandra Baugher, vice president of the dealership, told Judge Ross Krumm that General Motors had notified Baugher Chevrolet-Buick this summer that it was in violation of its franchise agreement.
She said the franchise agreement was being terminated because Baugher no longer had a floor plan to purchase new vehicles.
Sandra Baugher said the inability to purchase new vehicles meant that Baugher was left with primarily trucks.
“The gas prices went up and we had a large truck inventory and no cars to sell,” she said.
Sandra Baugher said numerous buyers were sought for the dealership.
She said she and her husband, John, the dealership president, had sought financial help from friends and business acquaintances to refinance the dealership debt.
Sandra Baugher said she and her husband had used retirement funds to pay down the debt to BB&T.
While Monday’s sale agreement will satisfy the debt owed to BB&T, Magee said about $450,000 is still owed to unsecured creditors.
Magee told Krumm that there is about $306,000 in judgments, promissory notes, GM stock, parts and insurance refunds and other money that can be applied to the unsecured debt owed creditors.
Krumm said he was approving the sale because “it was the best possible arrangement” Baugher could make faced with foreclosure and loss of its GM dealership agreement.
Magee said the sale is appropriate and good for Waynesboro.
“It’s time for a more well-financed buyer to take over,” he said.
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