Car Operation in Glendora Probed for ‘Irregularities’

Two Glendora car dealerships and an affiliated financing company that prided themselves on selling cars to new Asian immigrants have filed for bankruptcy protection and are under investigation by law enforcement and regulatory agencies, it was learned Friday.

Grand Motors, Grand Chevrolet and Grand Wilshire Finance filed for protection from their creditors under Chapter 11 of the federal bankruptcy code in U.S. District Court in Los Angeles late this week. Grand Wilshire made no list of assets in its filing but said it owed nearly $200 million to more than 200 creditors, including $174 million to Imperial Savings & Loan of San Diego.

Imperial bought $172 million worth of car loans made by Grand Wilshire to Grand Motors and Grand Chevrolet customers and is cooperating with federal authorities in the investigation of “irregularities” that may make up to $20 million of those loans uncollectible, said Rocco J. Fabiano, Imperial’s executive vice president for mortgage banking and consumer lending. He declined to elaborate on the alleged irregularities. All but $2 million of any loss should be covered by one of the thrift’s insurance policies, he said.

Started Months Ago

“I think it is fair to say there is an investigation,” said Kirk H. Newkirk, a deputy district attorney in the major fraud division of the Los Angeles District Attorney’s office. He declined to comment further.

California Department of Motor Vehicles spokesman Bill Gengler said Friday that the agency has been investigating Grand Motors and Grand Chevrolet for “at least a few months.” But he would not provide any details on the probe.

A source close to one of the investigations said that although Imperial is the only lending institution mentioned in Grand Wilshire’s filing, others may be affected. The filing says the list of creditors may be incomplete.

“We’re certainly not the only (lenders). We are the largest,” Imperial’s Fabiano said.

Eminiano (Jun) Reodica, president and controlling shareholder of Grand Wilshire and the dealerships, has been unavailable for comment for the last five days. A close associate said Wednesday that Reodica, a naturalized American who immigrated from the Philippines, was in that country trying to raise money for his dealerships. Fabiano said Friday that he thought Reodica was still there.

Grand Wilshire’s bankruptcy attorney, Edward Wolkowitz of Robinson, Diamant, Brill & Klausner in Los Angeles, did not return a reporter’s phone calls Friday.

Rely B. Roda, general manager of Grand Chevrolet, said Friday afternoon that both his dealership and Grand Motors were still open for business but were making very few sales because they could not offer car loans. He declined further comment. “I’m so involved in the dealership operations that I didn’t get involved in the financing,” he said.

The Grand Wilshire group--which by various counts includes from 14 to 32 interlocking companies, including some real estate holdings--may have collapsed because of unwise car loans, said Robert Ehrlich, president of Western General Insurance Co., an Encino-based car insurance company owed $400,000. Grand Wilshire guaranteed the car loans it sold to Imperial, and may have run into trouble from unexpectedly high repossessions, he said.

The bankruptcies mark an unhappy chapter in Reodica’s rags-to-riches story. He came to the United States in 1971 and, despite business experience and a bachelor’s degree from his homeland, was forced at first to accept work as a busboy. He became a General Motors showroom attendant in Detroit, and within four years was vice president of a Southern California General Motors dealership. He mortgaged his home and took out several loans to buy Grand Chevrolet in 1978. In an interview in July, 1987, he estimated that his two dealerships and their branch offices together would sell 11,000 cars worth $120 million.

Last year, Reodica proudly heralded a $250-million credit line for Grand Motors from General Electric Credit Corp., a finance subsidiary of General Electric Co. A GECC spokesman declined comment Friday on how much if any of the credit line may have been borrowed.