News : Vehicles hitting the road from Sky Auto

A growing legal and financial crisis is unfolding for Sky Auto Mall dealerships in Newhall and Center Point after a court ruling allowed the seizure of millions of dollars in vehicle inventory, followed closely by bankruptcy filings from the owners.

Alex, Igor, and Yelena Tovstanovsky, who are connected to dealerships in Iowa selling vehicles from Stellantis, Ford Motor Co., and Chevrolet, filed for Chapter 11 bankruptcy protection on March 20 in U.S. Bankruptcy Court for the Northern District of Illinois. The filings came within days of a court siding with lenders in lawsuits alleging the group engaged in floorplan fraud.

In Benton County, 6th Judicial District Judge Valerie Clay, granted a civil action this week allowing a financial services company to take possession of dealership inventory valued at more than $12 million. According to court documents, Clay approved a writ of replevin in favor of Stellantis Financial Services, a Texas-based lender affiliated with Stellantis. (Writ of Replevin - a legal document that allows a person to recover personal property that has been wrongfully taken or withheld from them. It enables the rightful owner to reclaim their property quickly while the legal dispute is resolved.)

In this case, the order permits Stellantis Financial Services to seize more than $12.3 million in vehicle inventory which is considered collateral on defaulted loans, from Sky Auto Mall at both locations in Center Point and Newhall.

The ruling follows allegations that the dealership group failed to repay floorplan financing loans, a common arrangement in which dealers borrow funds to purchase vehicle inventory and repay lenders as vehicles are sold. Lawsuits filed by lenders claim those obligations were not met.

The court-approved seizure of inventory represents a significant escalation in the case, effectively stripping the dealerships of a large portion of their vehicle supply while legal proceedings continue.

The Chapter 11 bankruptcy filings by the Tovstanovskys are expected to temporarily halt some collection actions as the case moves through federal court. However, the state court’s replevin order underscores the scale of the financial issues facing the dealership group.

The situation remains active, with both the bankruptcy proceedings and lender recovery efforts ongoing.