UPDATE: Zee Bridge Capital voluntarily discontinued this lawsuit on July 11 and defendants Harrison and Charles Gray acknowledged the discontinuance on behalf of themselves and the Respect Auto Group defendants. “We are working toward a mutually satisfactory settlement,” Harrison Gray stated in an email.
A Westchester finance company claims that a Yonkers auto dealership group has failed to repay a $4.3 million loan even after selling one of its Kia dealerships for more than $12 million.
Zee Bridge Capital, of Purchase, accused Respect Auto Group and owner Harrison Gray of breach of contract, in a complaint filed on July 2 in Westchester Supreme Court.
Gray sold Yonkers Kia without Zee Bridge’s approval, the complaint states, “and without using any of the proceeds of the sale to satisfy the debt owed to lender, despite the sale … occurring nearly two years after borrowers and guarantors defaulted on the loan.”
Gray said, in response to an email asking for his side of the story, “We are in active negotiations to reach a repayment solution.”
Bridge Capital is a middle market specialty finance company, founded by Lawrence Linksman, that focuses on business loans secured by real estate, according to its website.
Respect Auto Group consisted of Bronx Kia, Queensboro Volkswagen, Yonkers Kia and several affiliated companies.
In August 2021, Respect Auto Group I, Respect Bronx Holdings, and Long Island Resource Corp. borrowed $4.3 million from Zee Bridge. Interest on the 18-month loan was set at 13% per annum, with a default rate of 18%, and the loan was guaranteed by Harrison and Charles Gray.
The borrowers defaulted on the loan a year later, according to the complaint, in August 2022.
Zee Bridge says it is suing several Respect Auto entities to get back more than $4.3 million and “to prevent the continued dissipation of defendants’ assets.”
The lender claims that the companies are alter egos of Harrison Gray, in that he directly or indirectly owns all shares in each company, he is the principal manager, and he intermingles their funds.
One of the Respect Auto Group companies that borrowed the $4.3 million agreed not to sell or transfer any assets while the loan remained outstanding, according to the complaint. Yet this past April, Yonkers Kia was sold for $12.35 million without Zee Bridge’s approval.
Zee Bridge accused the borrowers and guarantors of breach of contract and is demanding $4.3 million plus interest, costs and fees.
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