Off Lease Only, a Palm Beach County-based auto seller with locations in five Florida cities and one in Texas, has permanently closed and is laying off 466 Florida workers, the company announced in a news release.
All of the company’s locations were closed on Thursday and affected employees will receive lump-sum severance payments, the company’s chief human resource officer wrote in a letter informing the state Department of Commerce of the layoffs.
The company, founded in 2004, began to experience a significant decline in revenue beginning in 2022, when used-car prices began increasing due to COVID-19-related supply chain constraints that reduced new car inventory available to competing dealers, CEO Leland Wilson wrote in a declaration posted as part of the company’s Chapter 11 bankruptcy filing in Delaware.
New-car dealers shifted to used-car sales, he wrote, particularly focusing on vehicles under four years old with less than 40,000 miles. “The company’s access to supply of used cars also dropped, due to lower new car supply over the past several years, and the fact that the company lost access to inventory from car rental companies and reduced lease return dynamics.”
High interest rates and inflation also impacted consumers’ ability to purchase cars, leading to a decrease in the company’s customers base and further impacting revenue, he wrote.
Layoffs, price hikes, and a campaign encouraging consumers to sell their cars to the company “at lower prices” in 2022 did not work, Wilson wrote.
A total of 545 employees were laid off and given 59 days of severance pay, Wilson wrote.
Wilson asked the bankruptcy court to allow the company to return deposits paid by customers whose purchases were not yet financed prior to the shutdown.
The company was 80% owned by New York-based investment firm Cerberus Capital Management and 20% owned by founders Mark and Eileen Fischer’s M&E OLO Holdings Inc., of Marathon, the declaration states.
Rebecca Radosevich, chief human resource officer, wrote in her letter to the state that the company had been engaged in discussions with its lenders and equity investors “in an effort to ensure a stable source of working capital sufficient to sustain day-to-day operations.”
The company simultaneously pursued a buyer for some or all of the company’s assets. But the sale of assets fell through “in a completely unforeseen and unforeseeable turn of events,” she wrote, “and there are no other additional financing options available” to fund continuing operations.
The letter detailed the number of employees permanently laid off from the company’s five Florida locations:
- 163 employees at the company’s location at 1200 S. Congress Ave., West Palm Beach
- 68 employees at 827 S. State Road 7, North Lauderdale
- 75 employees at 5580 NW 145th St., Opa Locka
- 111 employees at 8443 McCoy Road, Orlando
- 49 employees at 3230 14th St., Bradenton
The list includes 81 sales associates, 24 finance managers, 52 mechanics, 61 security guards, 18 sales managers, 13 vehicle appraisers, 13 vehicle assessment specialists, 11 receivers, and 10 customer-service associates, among others.
In its Chapter 11 bankruptcy filing, the company disclosed assets and liabilities between $100 million and $500 million and between 1,000 and 5,000 creditors.
Wilson’s declaration states that the company’s outstanding funded debt obligation totals $138.6 million.
Unsecured creditors include Spirit Realty, $5.6 million; M&E Holdings, $5.3 million; Cerberus Technology Solutions, $2.9 million; and Cerberus Operations and Advisory Company, $556,000; Dent Wizard, $417,980; and Google, $311,364.
Customers with inquiries should email firstname.lastname@example.org, the company’s website says.
Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at email@example.com.