543 N.E.2d 950, 187 Ill. App. 3d 699, 135 Ill. Dec. 382 1989.IL.1309
Appeal from the Circuit Court of La Salle County; the Hon. Louis J. Perona, Judge, presiding.
PRESIDING JUSTICE WOMBACHER delivered the opinion of the court. STOUDER and BARRY, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE WOMBACHER
On January 8, 1988, Valley Pontiac entered into an asset purchase agreement with the defendant, Thornton Pontiac, in order to purchase the defendant's automobile dealership. The purchase price was set at $580,000, which included a $150,000 cash down payment.
Valley Pontiac was also granted an option to purchase the building which housed the dealership.
In contemplation of the closing of the dealership sale, a Valley Pontiac shareholder purchased the real estate occupied by the dealership.
Subsequently, Valley Pontiac entered into a management agreement with Thornton Pontiac to permit Valley Pontiac to fund the operations of the dealership, pending approval by General Motors to transfer the franchise.
In March 1988, Champion Federal Savings and Loan Association of Bloomington, which was financing Thornton Pontiac's new motor vehicles, filed suit against Thornton Pontiac. The complaint included counts alleging fraud, consumer fraud and deceptive practices, breach of contract and an action to recover paid overdraft.
The following month, Valley Pontiac entered into a substituted asset purchase agreement with Thornton Pontiac. Thornton Pontiac issued a promissory note for $150,000 to Valley Pontiac which was due and payable in the event the closing on the purchase of the dealership did not occur. The previously executed management agreement was amended to conform to the terms of the new purchase agreement.
General Motors rejected the application to transfer the franchise, citing the pending litigation brought against Thornton Pontiac by Champion Federal. General Motors informed Thornton Pontiac of its intention to exercise its right of first refusal to purchase the dealership assets.
Subsequently, the asset purchase agreement was terminated and Valley Pontiac made demand upon Thornton Pontiac to pay on the promissory note.
Thornton Pontiac was eventually sold for $592,500 to Ozer Oldsmobile-GMC Truck, Inc. Estimated debts of the dealership at the time ...