Off Lease Only files Chapter 11 bankruptcy with plans to wind down

By Sarah Lizee

Olympia, Wash., Sept. 7 – Off Lease Only and some of its affiliates today filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on Thursday to pursue an orderly winddown of its business, according to a press release.

The company cited significant challenges and competitive pressures resulting from unprecedented changes to the automotive retail landscape.

“The industry has been impacted by inventory scarcity, and vehicle price inflation stemming from supply chain disruptions and multi-year declines in new vehicle production,” the company said in the release.

“Elevated pricing and rising interest rates have further deteriorated conditions in the automotive retail market, weakening consumer demand and affordability.”

Off Lease said it explored a range of strategic options, but industry headwinds coupled with the decreased affordability of used vehicles have necessitated the decision to pursue an orderly winddown of the business.

The company is seeking court approval to use the cash collateral of its prepetition lenders – Ally Bank, Spirit Realty, LP and Cerberus Off Lease Only LLC.

In its petition, the company listed 1,000 to 5,000 creditors, $100 million to $500 million in liabilities and $100 million to $500 million in assets.

The filing states funds will be available for distribution to unsecured creditors.

The largest unsecured creditors are Spirit Realty, based in Dallas, with a $5.62 million landlord or real property lease claim, M&E Holdings, based in Marathon, Fla., with a $5.28 million loan claim, and Cerberus Technology Solutions, based in New York, with a $2.94 million professional services claim.

Off Lease Only is represented by Proskauer Rose LLP as legal counsel and FTI Consulting as financial adviser.

Off Lease Only is an auto retailer based in West Palm Beach, Fla. The Chapter 11 case number is 23-11388.

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