Industry Research

Debt Default Could Bankrupt Metro Cars

Posted on June 17, 2009 by LCT Staff - Also by this author - About the author

DETROIT — A bank says it is forcing the liquidation of much of the business empire of Grosse Pointe Farms businessman and Metro Cars founder Cullan Meathe after his companies allegedly defaulted on loans and interest totaling $45.3 million.

But an official at Detroit Metropolitan Airport — where Metro Cars holds a roughly $9 million a year parking shuttle contract and is set to resume control of the exclusive limousine contract on July 1 — said he understands the companies are reorganizing.

Airport spokesman Scott Wintner said he was told Lansing lobbyist Gregory Eaton, a Metro Cars partner, plans to buy out Meathe's interests and continue to operate the companies.

Airport management "is currently analyzing the legal aspects of Metro Cars' planned transactions to determine if it has any sort of impact" on the contracts, said Michael Conway, an airport spokesman.

The Bank of Montreal published a foreclosure notice in The Detroit News on Thursday saying it planned to sell the assets of Metro Group Holding Co. Inc., including Metro Cars Inc., Metro Coach LLC, Yellow Cab Service Corp. of Florida Inc., and other related companies, at a public auction in Chicago on June 25.

Meathe, who also signed a limited personal guarantee for the debt, can only stop the liquidation by paying the debt in full, plus the bank's costs, before the sale date, the notice said.

Telephone and e-mail messages left Friday for Meathe and his business attorney, Alan Shanaman of Bloomfield Hills, were not returned. Eaton could not be reached.

Meathe, a significant political donor to both former Detroit Mayor Kwame Kilpatrick and the late Wayne County Executive Edward H. McNamara, has business interests aside from his transportation companies in Michigan and Florida, including two companies involved in controversial public real estate deals in Detroit's Corktown area.

Meathe is also a principal investor in the redevelopment of the former Jacobson's department store in Grosse Pointe, again through a company that is not part of the Metro Cars group of companies.

Source: The Detroit News

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