Lex Brodie's Tire Co., Hawaii's largest independent tire dealer, has been forced into foreclosure and bought by the subsidiary of an Arizona commercial finance company.
The foreclosure came about after a plan to expand the business by owner John Mayo failed, leaving him financially overextended.
Finova Mezzanine Capital of Nashville, Tenn., now controls Lex Brodie's-which operates four tire stores on the island of Oahu, including two in Honolulu and one each in Aiea and Waipahu. However, the company will seek a buyer for the 41-year-old retail chain as soon as possible, a spokesman said. Shortly before the foreclosure, Lex Brodie's closed its fifth store, on the island of Maui.
Finova Mezzanine is a subsidiary of Finova Group Inc. of Scottsdale, Ariz.
Mr. Mayo's expansion plan centered on taking over a chain of 25 gas stations-operating as Arco and 7-Eleven-on Oahu. The deal faltered, though, earlier this year after two station operators whose leases were being terminated obtained an injunction against the action, according to local news reports. That stalled the deal, putting it in limbo and leaving Mr. Mayo overextended.
At that point, Finova, which had arranged credit for Mr. Mayo several years earlier, entered the picture, forcing the foreclosure in order to protect its interests. Finova set up a new company, Finova Mayo Holdings L.L.C., to take over the assets of National Tire of Hawaii, which is the corporate name for Lex Brodie's, the Finova spokesman said.
Finova itself emerged from Chapter 11 bankruptcy protection only last August, thanks to a $5.6 billion loan from Berkshire Hathaway Inc.
The foreclosure left Mr. Mayo with ``substantial'' liabilities, a situation he said he's handling with creditors. He told Tire Business he has no concrete plans for future business endeavors, but for now is remaining in Hawaii.
In August 2001, Mr. Mayo had projected the dealership's sales in 2001 would reach $30 million, with revenue coming equally from three sources-tires, automotive service and other, represented principally by gasoline sales.
Lex Brodie's sells primarily Michelin, BFGoodrich, Uniroyal and Yokohama tires and Panther wheels. It performs a wide range of automotive services. In 2001, it was named the first AAA-approved repair garage by AAA Hawaii.
Lex Brodie's also is part of the Tire Alliance Groupe and Del-Nat Tire Corp. buying groups.
Mr. Mayo, originally from Tennessee, bought the Brodie's chain from founder Lex Brodie in 1991. Mr. Brodie, 87, is active in local politics and has served three terms on the Oahu school board.
He started in the tire business in 1961, with a single location tire store and gas station in Honolulu. Prior to that he had spent 20 years in the pineapple growing and canning business.