Chrysler executive Jim Press has been sued by a California credit union for failing to repay more than $400,000 on a loan dating back to his stint as chief of Toyota Motor Corp's U.S. operations, court records show.
Press, 62, deputy chief executive at Chrysler, arranged last year to repay nearly $610,000 to the Western Federal Credit Union, plans that were derailed when Chrysler canceled year-end executive bonuses as it plunged toward bankruptcy, the records show.
One of several leadership hires by Chrysler in 2007, Press was lured from Toyota to rebuild the automaker by private equity firm Cerberus Capital Management LP.
No comment. Thank you for your interest, Press said in an email to Reuters. The lawsuit was filed June 30 in Oakland County Circuit Court.
Press is represented in the lawsuit by attorney Wallace Handler. Handler declined to comment on the lawsuit. A lawyer for the credit union also declined to comment.
The executive and his wife have a nearly 6,900-square-foot house in Birmingham, Michigan, a Detroit suburb, county records show. That sprawling New England-style home with six bedrooms has been listed for sale at $3.15 million, according to a listing with a local realtor.
Press and the credit union, a successor to the Toyota Federal Credit Union, reached an agreement in June 2008 for the executive to repay the unsecured line of credit he had with Toyota.
He paid $200,000 immediately and prepared to pay the nearly $610,000 balance plus interest over three payments. He made a payment in August 2008, but missed payments in November 2008 and February as the U.S. auto industry and Chrysler faltered.
Press pleaded his case in a letter to the Western Federal Credit union in November seeking new terms to repay the loans. He said that he had tried to obtain loans at his two current banks and sought to refinance his house without success.
I am not able to make the November and February payments due to the elimination of bonuses which was just announced by my company, Press wrote in the letter, which was attached as an exhibit to the credit union's lawsuit.
The basis of my agreement to make the November and February payments was the pending receipt of my year end bonus, Press said.
Due to the turmoil in the automobile industry and uncertainty surrounding our ownership, my request for bonus payment was denied, Press said. I am attempting to arrange for a loan against my future bonus with my employer which would allow me to pay this loan off.
Chrysler was foundering in November as the financial crisis after the Lehman Brothers failure froze credit markets and drove U.S. auto sales to the lowest levels in decades.
Ultimately, Chrysler survived on U.S. government emergency loans and was reorganized under an Obama administration-guided bankruptcy that has left the automaker under management control of Italy's Fiat SpA.
The credit union lawsuit sought more than $467,000 at the time of the June 30 filing under the terms of the note.
Press was the only member of Chrysler's senior leadership team to remain with the company after its fast-track bankruptcy.
Fiat Chief Executive Sergio Marchionne has assumed operational control of Chrysler and has revamped its management structure so that managers in charge of its three brands report directly to him.
Two people briefed on the matter said in late August that Press had conveyed plans to leave Chrysler by November.
During a 37-year career at Toyota, Press became the first non-Japanese person elected to Toyota's board of directors.
The lawsuit against Press was first reported by The Detroit News on Friday.
(Reporting by David Bailey, editing by Matthew Lewis)