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Saturday, November 07, 2009
Zangara Tried Gambling in Failed Bid To Save Business
By Michael Hartranft
Copyright © 2009 Albuquerque Journal
Journal Staff Writer
Faced with a deepening recession and problems getting credit for his dealership, iconic auto pitch man Ken Zangara decided to roll the dice late last year in an attempt to salvage the business.
Literally.
The former Albuquerque auto dealer and the name behind Zangara Dodge racked up a $250,000 gambling loss just months before he closed his dealership in February.
"I was trying to win money to save the store, but that's all the comments I'm going to make," Zangara told the Journal in a brief telephone interview Friday when asked about the loss.
Zangara and his wife, Kathy Sue Zangara, filed for a Chapter 7 bankruptcy on Oct. 20. They list total liabilities of more than $5.36 million.
Their total assets amount to about $2.79 million — $2.6 million in real property and $194,868.50 in personal property, according to the filing.
Zangara Dodge was founded in 1991. It closed its doors Feb. 17, citing the economic crisis and loss of its primary lending source as the causes. The location has since been taken over by Larry H. Miller's Chrysler Jeep Dodge dealership.
At the time, Zangara Dodge also was under investigation by the state Attorney General's office concerning numerous consumer complaints over alleged illegal business practices.
The bankruptcy filing lists $2.56 million in secured claims by creditors, including a $2.29 million Bank of America mortgage; $23,500 by creditors holding priority claims; and $2.78 million by creditors holding unsecured nonpriority claims, most of which identify Zangara Dodge as a co-debtor.
The statement of financial affairs in the filing shows a gambling loss of $250,000 in November 2008. There are no other details.
Among the listed creditors holding unsecured priority claims are the Venetian Resort Hotel Casino in Las Vegas, Nev., with a claim of $95,000, and the Wynn Las Vegas, with a claim of $55,000.
On Friday, Zangara said he was "trying to hang in there and start again."
He said his only other comments on the bankruptcy filing would be those he made in a letter he sent to customers last month. In the letter, he apologized for having to close the dealership, which employed about 150 people, and attempted to explain the events that led to the closing, including his efforts to recapitalize. Also in the letter, he said he had been approved for a loan by a merchant bank before Chrysler Financial seized the assets and forced the closure.
"How many times do you kick a dead dog?" he said Friday. "It doesn't seem right."
In March, the Attorney General's Office sought to have Zangara Dodge found in contempt of court for alleged illegal business practices it claimed violated a 2006 court agreement that settled previous complaints against the dealership. At the time, the Consumer Protection Division had received nearly 100 complaints against Zangara since fall 2008, including claims it failed to pay off loans on trade-ins and failed to pay MVD titling and registration fees.
A settlement was announced last month in which Zangara Dodge will pay $100,000 to the attorney general to be used as restitution for affected customers. The parties also will divide about $7,000 from the remaining balance in an earlier consumer restitution fund used to repay consumers who were overcharged Motor Vehicle Department titling and registration fees.
Both Zangara and his business had ascended to iconic status in New Mexico.
The former chairman of the New Mexico Automotive Dealers Association, Zangara has been recognized for his support of local charities such as the United Way, and he was deeply involved in politics.
He is a former Bernalillo County chairman of the Republican Party and last year was the New Mexico finance chair for Republican presidential candidate John McCain.
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