Eddie Gilstrap Motors - Chapter 11 APA Summary

Private Sale / Asset Purchase Agreement Summary

Sale Terms

• Eddie Gilstrap Motors, Inc. seeks emergency approval to sell substantially all of its assets to John Jones by private sale under an asset purchase agreement effective April 22, 2026, free and clear of all third-party liens, claims and encumbrances under section 363(f), with liens attaching to the sale proceeds; the debtor asks the court to enter its tendered order authorizing the sale on those terms.
• The debtor says the sale will pay its creditors nearly $5 million within a few weeks of approval, leaving deficiencies far smaller than if Ford Motor Credit were allowed to block the sale and liquidate the assets, and that the sale serves the guarantors of its financial obligations.
• The closing numbers presented at the Oct. 2, 2026, closing projected a shortfall of approximately $700,000 on Ford Motor Credit's floor plan.
• The motion proposes no auction or overbid process. The debtor says that, on information and belief, Jones is the only prospective buyer and is ready, willing and able to complete the purchase on the APA's terms.

Parties Involved

• Seller: Eddie Gilstrap Motors, Inc., a closely held, minority-owned retail automobile dealership that has operated in Southern Indiana for 89 years. It is headquartered in Salem, Indiana, and its dealership is in Washington County.
• Purchaser: John Jones, who has been approved as the Ford dealer for the debtor's location, has obtained the dealer's license for that site and has run the dealership since taking possession on Sept. 29, 2026.
• Secured creditor: Ford Motor Credit, which holds the floor plan facing the projected shortfall and has sued the debtor for replevin in federal district court.

Assets Being Sold

• The sale covers substantially all of the debtor's assets. The debtor says their value lies mainly in its ongoing operations, equipment, inventory, accounts and the goodwill it has built in the community over its 89-year history.

Background

• The debtor was already in a difficult financial and liquidity position when a major winter storm hit Southern Indiana and the greater Ohio Valley from Jan. 24 to Jan. 26, 2026. The storm disrupted the dealership's sales, service, parts and administrative operations and reduced ordinary revenue. Meanwhile, fixed expenses, inventory carrying costs, financing obligations and payroll kept running.
• The debtor calls the storm a material contributing factor, though not the only reason, in management's decision to pursue a going-concern sale. In the weeks and months after the storm, the debtor concluded that a sale was the best way to preserve the dealership's value, operations and workforce. That process produced the APA with Jones.

Closing History

• The APA was originally set to close shortly after it was signed. Ford Motor Credit, a secured creditor, interfered with the closing by placing its agents in the dealership and restricting the debtor's vehicle sales and related operations. Later closing dates were set and then repeatedly postponed, which the debtor says was no fault of its own or of Jones.
• At a "soft closing" on Sept. 29, 2026, the debtor handed possession of its assets to Jones, who by then was an approved Ford dealer. Jones began operating the dealership even though the transaction had not officially closed.
• By the second scheduled closing on Oct. 2, 2026, Jones had been approved as the Ford dealer for the location and had obtained its dealer's license. All sale documents had been signed and placed in escrow, awaiting final closing and funding of the purchase price. However, the accounting numbers presented at that closing were higher than either party expected and projected the roughly $700,000 floor-plan shortfall.
• Ford Motor Credit had audited the debtor's operations weekly for the previous eight months. Over the debtor's objection, it began wholesaling the debtor's used-vehicle inventory to other dealers. The debtor says this increased losses that could otherwise have been minimized, and that Ford Motor Credit was on-site and directing operations the whole time.

Ford Motor Credit Replevin Action

• On Oct. 23, 2026, Ford Motor Credit sued the debtor and others in the U.S. District Court for the Southern District of Indiana, seeking replevin and other remedies.
• The debtor filed for Chapter 11 the next day, Oct. 24, 2026. It says it filed solely to keep control of its property so it can complete the sale to Jones, and to prevent Ford Motor Credit from seeking prejudgment attachment of its assets.

Post-Sale Path

• Alongside the sale, the debtor expects to file a plan of liquidation and exit Chapter 11 as quickly as possible. It says a fast sale will keep the business running under Jones and preserve its relationships with employees, vendors and customers until the sale is complete.

Key Dates

• Winter storm: Jan. 24 to Jan. 26, 2026
• APA effective date: April 22, 2026
• Soft closing and transfer of possession to Jones: Sept. 29, 2026
• Second scheduled closing: Oct. 2, 2026
• Ford Motor Credit replevin action filed: Oct. 23, 2026
• Petition date: Oct. 24, 2026
• Emergency sale motion filed: Oct. 27, 2026