HOLBROOK — It’s fair to say that Tate’s Auto Group is finished.
The legal jeopardy entangling the four companies the public has come to know as the Tate dealerships has now ensnared Linda Tate and her son, Richard Berry and his wife, Amy, as individuals.
In March 2019, Tate Ford-Lincoln Mercury, Inc., Tate’s Auto Center of Gallup, Inc., Tate’s Automotive, Inc. and Tate’s Auto Center of Winslow, Inc. filed for bankruptcy protection seeking to reorganize its debts in a combined Chapter 11 proceeding in Tuscon Bankruptcy Court. The filing came just weeks after the companies and others were sued in the Navajo County Superior Court by Ford Motor Credit Company, LLC, for about $22 million.
The Ford suit was the latest in a series of Tate’s legal troubles — a total of three lawsuits.
The Federal Trade Commission in July, 2018, sued the companies and Berry alleging they had, since at least 2014, falsified financing applications submitted by customers, falsified down payment information and “disseminated deceptive advertisements,” according to the FTC complaint.
The bankruptcy case stopped, or “stayed” all the lawsuits — the idea is to allow a struggling enterprise to reorganize its affairs and become profitable again. Berry was in charge of the companies through the reorganization.
But the reorganization never happened. In July, Bankruptcy Judge Brenda Whinery converted the cases from a reorganization to a liquidation (under Chapter 7 of the bankruptcy code) noting the lack of transparency, the failure to file required monthly reports with the court, and the lack of “leadership at the helm” of the reorganization. The final report of the Chapter 11 trustee says that the companies’ “balances turned over to the (new Chapter 7) Trustee” was around $891,000.
From that, accountants, appraisers, the debtors’ lawyers, the trustee and his lawyers, and other administrative expenses will be paid first; if there is anything left it will go to various classes of creditors in an order set by law.
All the debts that are not paid will be “discharged,” or go away. Not so for the debts of Linda Tate and Richard Berry to Ford.
In a new twist in the Tate’s saga, an amended complaint was allowed by the Navajo County Court in August. The first time around, Ford Motor Credit made claims — amounting to some $20 million — against the individuals based on their personally guaranteeing the debts of the Tate companies. That includes the mortgages on the land and buildings the Tate dealerships in Arizona operated out of. Ford foreclosed on those properties through a deed of trust sale on July 17.
Many of the cars one sees at a dealership come from the manufacturer, in this case, say, Ford Motor Company. The dealership buys them with money advanced by Ford Credit and gives a lien to Ford Credit for each vehicle, and the dealership pays off the lien as each vehicle is sold. It’s called a trust agreement, because some of the money the customer pays the dealership is held in trust, to pay off the loan to Ford Credit.
But at least 97 times, the suit alleges, Tate dealerships sold vehicles “out of trust,” as its called, and didn’t pay Ford Credit for liens Ford did, or should have had on them. Not only that, it is alleged that Tate dealerships also gave liens to other lenders, like Nissan Motors Acceptance Corporation, on the same vehicles they had given Ford liens on.
This so-called “double financing” practice, says the suit, was, upon Ford’s information and belief, “authorized, directed, or caused” by Mr. Berry and that Berry also “failed to exercise reasonable care” regarding the Tate dealerships’ representations to Ford Credit that certain information about the vehicles in question, called a certificate of origin, was false.
Richard and Amy Berry have both denied the allegations.
No trial date has yet been set.
ARIZONA — The U.S. Marshals Service is offering a $20,000 reward for information leading to the arrest of escaped murder suspects Blane and Susan Barksdale, ages 56 and 59 respectively.
A manhunt in Arizona has been ongoing since Aug. 30 without results, frustrating those trying to find the two murder suspects. With a bounty of $10,000 for each, law enforcement hopes to get a tip that will let them catch the Barksdales before anyone gets hurt.
U.S. Deputy Marshal Michael Adams said they are getting a lot of tips, but none that have panned out.
The fugitives from justice escaped private company security guards in Blanding, Utah Aug. 30 while the guards were transporting them from Henrietta, New York, to Tucson as suspects in the first degree murder of 72-year-old Tucson resident Frank Bligh.
David Gonzales, the U.S. Marshal for Arizona, told the Associated Press that Susan feigned an intestinal problem during a stop in southern Utah. She and Blane then charged the guards, overpowered them, and bound them with shoelaces before putting them in the back of a transport van with an unidentified third inmate.
Gonzales said the Barksdales then stole money from the guards, but missed a handgun inside a lock box. He said they then drove the van to Vernon where they got a red GMC truck from a “friend” who has not been charged but is still being questioned. It is unknown if they are still driving that truck, have abandoned it, or are driving something else.
Victim’s body still missing
Victim Frank Bligh’s house in the 3500 block of South Calexico Avenue in Tucson reportedly suffered an explosion sometime during the day he was killed, on April 16. His car was found abandoned April 17 on South Wilmot Road in Tucson, but his body has reportedly never been found. Authorities said that evidence found in his abandoned car indicate he is probably dead.
Tucson Police Department investigators filed charges of first degree murder, first degree burglary, arson of an occupied structure, felony criminal damage and auto theft against Blane and Susan Barksdale.
Blane also has a charge of prohibited possessor in possession of weapons attached to his arrest warrant.
It was first thought that the Barksdales had escaped near St. Johns in Apache County. But it was soon evident that they had escaped in Utah and drove the van they were being transported in to Vernon where they met with a person who gave them a red GMC Sierra pickup, Arizona license 127XTY, with damage to the front passenger side and rear bumper.
The Barksdales also have connections in Vernon, but it is not known the nature of those connections or the names of anyone they may know in Vernon.
The Independent spoke with Apache County Sheriff’s Office officials in St. Johns Sept. 4 asking them how an announcement about the escape got into the hands of non-police entities who then sent it to the Independent before any official public announcement was made.
ACSO Chief Deputy Brannon Eagar said the notice of the Barksdales escape that was sent to The Independent was a police and first responder inter-agency notice that was never intended for public release and that is why some of the information in it was inaccurate, because all the details were not known yet.
Eagar said it was only to disseminate information within the law enforcement agencies involved in trying to capture the escaped fugitives.
“That is why some of the information in the official press release to the public was different than what was in the memo/notice sent to first responders involved in the search for the Barksdales when they first escaped,” Eagar said.
The Barksdales are considered armed and dangerous and should not be approached if anyone spots them.
Instead people are asked to call 911 or 88-CRIME if they think they have seen the fugitives.
Information from AZCentral.com, the Associated Press and the Tucson Daily Star contributed to his story.
SHOW LOW — Chances are, you’ve seen it.
If you ask any daily driver that travels White Mountain Road/SR260 in Show Low about “the cabin on the hill,” they recognize the unfinished, two-story cabin that has been a fly in the ointment for residents living in the same neighborhood.
In February, builder and developer, Bill Haltom, of Creative Development, appeared before the Show Low Planning and Zoning Commission, asking asking for a zoning change from “general commercial” (C-2) to “single-family residential” (R1-15) for the cabin on Meadow View Place.
In consideration of concerns expressed by residents in the area, the Planning and Zoning Commission and the Show Low City Council approved the zoning change with a timeframe stipulation requiring completion of the outside of the building within 90 days.
As of Tuesday, Sept. 3, the cabin/building appears the same as it did in February, with only the frame and white tar paper (vapor barrier) attached to the outside.
Haltom has repeatedly met resistance from neighborhood residents, including some who spoke during the March 5 council meeting to share their concerns about the unfinished structure.
On July 18, a neighborhood meeting was held by the City of Show Low to inform area residents about a possible reversion of the zoning change due to non-compliance with the original zoning change stipulation. Additionally, a public hearing was held on August 27 in which residents were mailed notices and provided the opportunity to attend or respond.
Now, six months later after the requested zoning change, the issue has again come before the commission and council as a result of Haltom’s non-compliance with the original zoning stipulation. Following the August public hearing, the commission voted unanimously to recommend to the city council that the zoning Ordinance 2019-04 remain in effect with some conditions remaining. They also agreed to recommend deletion of condition number 6 which required completion of the outside of the structure within 90 days.
Condition number 6 appears most significant because the commission recommended that it “be deleted.” It reads: “applicant agrees to complete the exterior of the building within 90 days.”
The zoning change request appeared on Tuesday’s council agenda for discussion and a vote. It did not go unnoticed that Haltom did not attend the council meeting.
The discussion began with Councilman Crittenden asking Planning and Zoning Commission Director Justen Tregaskes, “60 days, 90 days — what’s going to make this project get completed?”
“Part of the standard building permits are active for a period of six months as long as there is activity on the project,” says Tregaskes.
“We recently completed an inspection on the property,” added Tregaskes. “Our building official met with the engineer on the project, walked the project, and inspected the progress to date. As part of that, he was given the okay to go ahead to move forward with construction of the project.” Tresgaskes indicated that some re-engineering work has been completed on the project that is not obvious.
Tregaskes explained that although the council made a stipulation, there is really no consequence, there are no teeth to the requirement.
“There are some requirements based on city code, but on adopted building code, it’s really up to the property owner to make sure they are moving forward,” assured Tregaskes.
“If they don’t, it’s always been our policy to work with the property owner to try to get properties and projects completed. However, in some cases as directed by, recommended by council, we could move forward with cancelling the building permit if they do not meet the timeline,” he added.
Councilman Leech asked Tegaskes for more clarification regarding the reasoning behind removal of “condition number 6” in the building permit.
“You have to remove that condition, otherwise he’s in non-compliance and it automatically reverts back,” answered Show Low Mayor Daryl Seymore.
“Basically, the 90 days has passed and he didn’t meet the condition and he didn’t comply,” said City Manager Ed Muder.
“We as a council put on there 90 days to have that thing done and it hasn’t been done and now we’re going to scratch it?” asked Vice Mayor Mike Allsop.
“I think what we need to do, as we come together as a council, we need to put something in process, we need to have something we can sink our teeth into and say this is what we are asking. Because, what we did is we had a lot of people coming to us and saying ‘what kind of ugly looking thing is that and when is it going to get done?’”
“So we, working with the voters of Show Low said okay we will take action on it and that’s about the only thing we can do,” explained Allsop. “So still, after that, he kind of thumbed his nose at us and didn’t’ do anything for 90 days … But it seems like when, whenever we did anything like this … council can’t do anything about it.”
“We’re getting the same pressure from the staff side and feel that same frustration,” acknowledged Tregaskes. “We receive seems like every week, we are getting phone calls related to this ... The building of these types of units is a permitted use. In this case it is difficult.”
“The only reason that the condition was able to be put on for 90 days is because the applicant himself stipulated that he would agree to that. In this case, recourse that the council has is that you can go ahead and revert back … That is one recourse because he did not comply with condition number 6. We issue hundreds of building permits each year. We seem to have a problem with one of them. We have one highly visible issue out of all of those permits,” adds Tregaskes.
“What’s making this really difficult, it this is a permitted use and the builder agreed to that stipulation,” confirmed City Attorney Morgan Brown.
“… (T)o revert it back is only going to punish the neighbors to revert it back to commercial... it’s now an active nuisance ... My neighborhood viewpoint is that, to revert it back to commercial, is going to hurt it further,” said resident Kim Fernau.
Other neighbors appeared to agree with her.
“I oppose the re-zoning … I agree with the Fernau with I don’t see any reason to revert it back (to commercial),” echoed Meadow View Place resident Kyle Thomas. “I don’t know that there is ever going to be 18 structures there if he can’t seem to get one done. So yeah, I say keep it residential zoning.”
As a result, the council voted 5 to 1 to maintain the existing property zoning as single family residential (R1-15).
“ … I think he should have been here … it upsets me that he wasn’t here but I agree with them, I lived there I would want it to stay to residential too,” stated councilman John Leach Jr.