Allstate Sues Defunct California Auto Repair Co.

April 25, 2005

Insurance giant Allstate Corp. on April 22 sued the liquidator of an out-of-business automotive repair company that has held about 1,000 cars awaiting collision repairs until its assets are sold.

Allstate filed a Superior Court suit against Credit Managers Association of California, which is handling assets for Santa Monica-based M2 Automotive Inc., after the association refused to give up more than 100 vehicles owned by Allstate customers, the insurance company said in a statement.

“Allstate cannot tolerate our customers and claimants being treated this way – their vehicles are being held hostage as a result of circumstances far outside their control,” said claims field Director Terry Lewkoski.

The vehicles are being held in 13 of 27 M2 centers, Allstate said.

A phone call to Credit Managers Association late Friday seeking comment was not immediately returned.

M2 Automotive had been in negotiations to be acquired by Irvine-based Caliber Collision Centers but the deal collapsed late last week, Mike Joncich, adjustment bureau manager at CMA Business Credit Services, said earlier this week.

Joncich said M2’s creditor withdrew its funding and froze its assets, which were turned over to CMA for liquidation.

About 700 M2 employees were laid off and cars were locked in at its 27 collision centers statewide.

A sealed bid auction was scheduled to be held Friday and the best bid will be identified over the weekend. Operations were expected to resume next week, Joncich said.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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