Broadway Ford Truck Sales - Chapter 11 Case Summary

Business Description

Headquartered in St. Louis, Missouri, Broadway Ford Truck Sales, Inc. ("Broadway" or the "Debtor") is a Delaware corporation established in 1964 that sells and services new and used Ford commercial vehicles.

• The Debtor operates out of an 8.5-acre campus located at 812 E. Taylor Avenue in St. Louis, Missouri.
• Broadway's Ford Pro Elite Service Center features over 85,000 square feet of service capacity under one roof and 56 heavy truck bays.

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Corporate History

Over its six decades of operation, Broadway Ford earned significant recognition within the Ford dealer network and the broader commercial truck industry, receiving several local and national awards while maintaining an active civic presence throughout the St. Louis area.

• Dennis Phillips, a former sales manager with Broadway, acquired the dealership in 2018.

Relocation and Service Center Build-Out

• In April 2022, Broadway relocated from its original location on South Broadway in the Soulard neighborhood of St. Louis to its current facility at 812 E. Taylor in north St. Louis City.
• In 2025, Broadway opened a Ford Pro Elite Service Center, one of only 68 such facilities nationwide and the only one within a 200-mile radius.
  • The company invested approximately $5.6 million in the build-out, which was designed to support 50 or more technicians across its 56 bays.

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Operations Overview

Broadway's business is divided between commercial automotive sales and sales of parts and automotive servicing. The Debtor serves a variety of institutional clients, including large utility companies, municipalities, and well-known local businesses.

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Prepetition Obligations

The Debtor's prepetition capital structure includes the following secured obligations:

Secured Debt

• FMCC Floorplan Facility: The Debtor is indebted to Ford Motor Credit Company ("FMCC"), which holds a first-position lien on cash collateral and on the Debtor's vehicle inventory.
• Varilease Finance, Inc.: Holds a first-position interest in certain of the Debtor's equipment used within its servicing department.

Potential Junior Liens

• The Debtor believes that Moneywell GRP, LLC, Ocean Funding Corp., Gulfstream Capital Solutions LLC, and St. Louis Bank may claim a junior interest on cash collateral and/or other assets.
  • The Debtor is evaluating the extent and validity of any claimed junior liens.

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Events Leading to Bankruptcy

While Broadway has a history of strong sales figures and recurring institutional customers, the business has faced a number of challenges that ultimately led to its Chapter 11 bankruptcy filing.

Legacy Fire and Facility Investments

• In 2017, shortly before Mr. Phillips's acquisition of the business, the dealership's service center and parts department were destroyed in a fire and were provisionally moved to operate out of temporary locations.
  • Broadway invested $600,000 in legal fees, environmental due diligence, and architectural planning with the intent to build a new parts center, but ultimately was unable to move forward with the project, and the dealership later moved to a new location.
• The debts associated with the build-out of the Ford Pro Elite Service Center created a significant additional cash burden for the business.

Unprofitable Expansion Efforts

• The company invested capital in ancillary product line inventory outside its core competency, which failed to sell as expected.
• Broadway also launched the directfactoryparts.com e-commerce platform in 2024. Over approximately one year of operation, the platform contributed in excess of $500,000 in losses before being shut down in April 2026.

Staffing Imbalances

• Broadway faced difficulties in staffing its newly built service center, which has capacity for 56 technicians but only staffs around twenty technicians due to a nationwide shortage.
• While the dealership operated with a shortage of technicians during the lead up to its bankruptcy, it was simultaneously overstaffed in other departments, with a headcount of 89, up from only 56 prior to moving to the new location in 2022.

Merchant Cash Advance Spiral and Floorplan Default

The combined pressures created a situation in which additional working capital was needed. After exhausting traditional sources of funds, Broadway turned to non-traditional merchant cash advance lenders.

• The terms of the merchant cash advance loans were onerous and created the need for additional loans to be taken out to service the existing loans.
  • In March 2026, the dealership was paying $95,000 per day to a single merchant cash advance lender and paid over $2 million to that lender during that month alone.
• Broadway also carried excessive vehicles on its floorplan, which created increased interest expenses and caused the dealership to fall behind on its payments to FMCC and become out of compliance with its floorplan financing. By the time of filing, the Debtor's financial situation was dire — it remained out of compliance with its floorplan and owed FMCC several million dollars.
• Several merchant cash advance lenders sought to collect on their claims and pursued judgments or payments from Broadway's customers, creating an immediate need to commence the Chapter 11 case.

Prepetition Restructuring Initiatives

In preparation for the Chapter 11 filing, Broadway took several significant operational and organizational steps:

• The company reduced its headcount by approximately 15%, with a targeted reduction of 20% by month-end, reducing total employment from a high of 89 to the low 70s.
• The company shut down the unprofitable directfactoryparts.com e-commerce platform, which had been a source of consistent losses.
• Management was restructured following the termination of the former President's employment:
  • Jim Schaeffer was appointed General Manager.
  • Tim Valley was named interim CFO.
  • Taylor Cook assumed the role of Fixed Ops Director.
  • Greg Kelly, the company's prior General Counsel, will serve as Chief Restructuring Officer to oversee the Chapter 11 proceedings.

Chapter 11 Filing and Sale Process

On May 18, 2026 (the "Petition Date"), Broadway filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Missouri. The business has refocused on its core competencies — the sales, parts, and service of commercial vehicles — supported by its position as the only Ford Pro Elite Service Center within a 200-mile radius.

• In the weeks leading up to the bankruptcy, Broadway interfaced with a number of potential purchasers in pursuit of a sale of all business assets.
• Broadway intends to use the Chapter 11 process to continue these efforts to sell the business to a new owner.
• The Debtor and FMCC have agreed to a stipulation governing the Debtor's use of cash collateral, the sale of vehicle units, and certain operational oversight by FMCC.

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First Day Motions and Applications

Concurrently with its petition, the Debtor filed a series of first day motions and applications, the approval of which the Debtor considers an important element of a successful Chapter 11 case.

Retention of Counsel

• The Debtor seeks to employ Carmody MacDonald P.C. ("CM") as bankruptcy counsel, citing the firm's experience in debtors' and creditors' rights and Chapter 11 business reorganizations, as well as its familiarity with the Debtor's business and legal affairs. The application is supported by the Declaration of Thomas H. Riske.

Cash Collateral

• The Debtor seeks authority to use cash collateral to continue operations and pay ordinary daily expenses, stating that it lacks sufficient working capital and financing to operate without it. FMCC holds a first-position interest in cash collateral and in the Debtor's vehicle inventory, and the Debtor and FMCC have agreed to a stipulation governing the Debtor's use of cash collateral, the sale of vehicle units, and certain operational oversight by FMCC.

Cash Management

• The Debtor seeks to maintain its existing cash management system, which is facilitated through accounts at St. Louis Bank, and to open debtor-in-possession accounts while maintaining the system with the funds currently held at St. Louis Bank.

Insurance

• The Debtor seeks authority to maintain its existing insurance policies with its third-party carriers and to pay related obligations as they come due, including premiums and fees.

Utilities

• The Debtor seeks to prohibit its utility companies from altering, refusing, or discontinuing service, and proposes a deposit equal to two weeks of its estimated monthly utility costs as adequate assurance of payment. No utility company currently holds a deposit from the Debtor.

Wages

• The Debtor seeks authority to pay outstanding prepetition employee wages, salaries, reimbursable employee expenses, and medical and other employee benefits, on the basis that nonpayment would impose undue hardship on employees, damage morale, and harm the Debtor's ability to reorganize.