Pub. 1 2012-2013 Issue 2

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S S U M M E R 2 0 1 2 16 new jersey auto retailer Now more than ever, your dealership needs a financial resource with a real understanding of your business and personal financial needs. One that provides flexibility to support your sales efforts and growth strategy. When you work with PNC’s Dealer Finance group you gain access to a broad range of banking and financial services including floorplan financing, retail financing, treasury management and wealth management. All of theses services are available from a dedicated relationship management team that lives in and understands your market. For more information on how PNC and its Dealer Finance group can help you drive your dealership forward, please contact Jim Kimble or Ed Koch at 856-489-2839 for floorplan financing and Steve Garton at 800-433-0067 for retail financing. PNC and ACHIEVEMENT are registeredmarks of The PNC Financial Services Group, Inc. (“PNC”). Banking and lending products and services and bank deposit products and investment and wealth management and fiduciary services are provided by PNC Bank, National Association, a wholly-owned subsidiary of PNC and Member FDIC . Services such as public finance advisory services, securities underwriting, and securities sales and trading are provided by PNC Capital Markets LLC, a registered broker-dealer and member of FINRA and SIPC. Lending and leasing products and services, including card services, trade finance and merchant services, as well as certain other banking products and services, require credit approval. ©2012 The PNC Financial Services Group, Inc. All rights reserved. CIB PDF 0212-008-65405 STAYINg IN THE PASSINg LANE An (Amended) Franchise Practices Act Case Study BY THOMAS G. RUSSOMANO, ESQ. T he amendments made to the Franchise Practices Act (FPA) in May 2011 were enacted with the goal of further expand- ing the protections afforded New Jersey dealers against the often arbitrary and harmful actions of manufacturers. We have witnessed the fact that certain of the amendments have achieved their intended effect and have resulted in saving dealers both time and money on needless litigation. During this past year, our firm represented a purchaser under an Asset Purchase Agreement, the substance of which included the sale and relocation of the assets and the franchise. The selling dealer had previously been served with a Termination Notice by the manufacturer. Prior to the amendments to the FPA, such a Termination Notice could have been the deathblow to the pro- posed transfer and it would have shifted the focus from consum- mating the sale to commencing an emergent court application to preserve the franchise and its value to the dealer and purchaser. This type of emergent application is time consuming and costly for the dealer and oftentimes results in the proposed purchaser walking away from the negotiations and, consequently, the dealer is left with nothing more than a terminated franchise. The addition of 56:10-30(d) to the FPA has kept the dealer’s focus on consummating the sale, thereby preserving the value of the franchise. Section 30(d) provides as follows: Notwithstanding the giving of notice of termination of a motor vehicle franchise pursuant to section 5 of P.L. 1971, c. 356 (C. 56:10-5), at any time prior to the date on which the termination becomes effective, the motor vehicle franchisee may enter into an agreement for, and submit to the motor vehicle franchisor, notice of the transfer, assignment or sale of the motor vehicle franchise to another person. Thereupon, the motor vehicle franchisor shall proceed as provided for in sec- tion 6 of P.L. 1971, c. 356 (C. 56:10-6). Upon approval of the transfer, assignment or sale by the motor vehicle franchisor and upon consummation of same, the notice of termination of the motor vehicle franchise shall be deemed withdrawn, and the transferee shall receive the motor vehicle franchise free and clear of all grounds for termination. Notwithstanding the terms of any notice, any court order or any other provision of law, a motor vehicle franchise termination shall not become effective while a notice of transfer, assignment or sale is pending with a motor vehicle franchisor. As the effective date of termination, as referenced in the Termi- nation Notice, had not yet occurred, the Asset Purchase Agree- ment was executed by our client and same was forwarded to the manufacturer for review and consideration under 56:10-6. Our client’s application was ultimately approved. This resulted in a considerable savings of time and money for the dealer and, as noted above, preserved the value of his franchise. Thomas G. Russomano, Esq. is an attorney with the law firm of Schiller & Pittenger, P.C.