Salem RV dealer shuts down, skirts bankruptcy

SALEM, Ore. -- Northwest RV Sales Inc. has made a move similar to filing for bankruptcy, raising questions about how much of a loss its estranged consignment customers will be asked to shoulder.

The move follows a state revocation of the Salem company's dealership certificate in early October after customers had complained it didn't pay for consigned goods on time.

Public records, documents and interviews show Northwest RV has a history of disregarding rules and leaving customers unsatisfied. More than that, it's unclear what kind of recourse customers have when consignment companies like Northwest RV don’t fulfill their end of a deal.

Ryan Johnson, son of company president Russell Johnson, defended his father in an interview outside of the business on Monday. Russell's health has been deteriorating for the last year and a half, he said, and the president wasn't able to be at Northwest RV often. "My dad would never allow this to happen" were he in better health, said the younger Johnson.

He said: "My dad's an honest Christian man."

Under Oregon law, consignment dealers have 10 days from when they sell a product to pay up. Court documents show Johnson signed an agreement with the Oregon Department of Justice in 2015 saying his company would follow the 10-day rule. This followed an investigation by the department into his business that year.

Micheal and Loretta Tryon, two retired state workers in Salem, had taken their 2010 Keystone Cougar — a 33-footer with a bedroom and living room — down to Yuma, Arizona. "We were snowbirds with it," said Loretta.

In May of this year, Michael took the fifth wheel to Northwest RV at 6492 Portland Road NE, standing to make $17,000 to $18,000 on the deal, a contract provided to the Statesman Journal shows.

they have yet to see any money from the deal.

A total of 15 complaints have been filed with the Department of Justice against Northwest RV. Six of those have been filed since Oct. 26, according to Kristina Edmunson, a spokeswoman for the department.

Last Thursday, officials said the department is reviewing the complaints and will let the company have a chance to respond, though the department would neither confirm nor deny a current investigation.

Another customer, Kenneth Kinkaid, said he consigned his 2011 Keystone Hideout trailer with the dealership this August. The 57-year-old auto-body repair tech was trying to make some money off the trailer he hadn’t been able to sell online.

He took his rig to Northwest RV, and by his account, an employee told him the trailer had sold Sept. 30.

Now, Kinkaid is trying to get the $12,500 dollars he alleges the company contractually owes him.

More than a month after his rig is said to have sold, Kinkaid has yet to see a nickel.

Kinkaid has gone to the authorities, from the Marion County Sheriff’s Office to the Oregon Department of Transportation. "In my book, the trailer is stolen," he said.

Larry Purdy, chief of DMV investigations, verified Kinkaid had gotten in contact. In an email, Purdy directed him to the Department of Justice and recommended getting a lawyer. He also suggested Kinkaid file a claim with Northwest RV's bond company in Connecticut.

Northwest RV had a $40,000 surety bond with the company, Purdy said. The thing is, that won't likely cover all of the claims.

Kinkaid said the sheriff’s office told him there was nothing they could do because he took the camper to Northwest RV willingly.

Lt. Chris Baldridge of the Marion County Sheriff's Office said with multiple complaints like this, the sheriff’s office would likely reach out to the Department of Justice. But he largely echoes Purdy, saying Kinkaid would have to take it up with an attorney. Right now, Baldridge said, the company would be in breach of contract.

“It’s the same as if you defaulted on your mortgage,” he said.

Consignments can be inherently risky, with a broken deal splintering to affect many people involved.

With one vehicle, you have the consignor, the lien holder, the new buyer and their lien holder, Purdy said. “You potentially have at least four victims on one transaction,” he said.

And Kinkaid doesn't seem sure lawyering up would be worth it. “I don’t know if I can afford that, to be honest with you,” he said, later adding, “If I had lost (the court battle) for some reason, you know, I’m out all that money.”

Northwest RV has initiated a common-law assignment for the benefit of creditors or an "ABC," which isn't quite the same as a bankruptcy.

Attorney Bob Vanden Bos, of Portland-based Vanden Bos and Chapman, LLP, said last Thursday there is “no guarantee” about how much creditors the company owes will be paid. Vanden Bos has represented the company.

The company has given over its assets to a person in charge of making a "pool" of funds to pay creditors, said Vanden Bos. Where bankruptcy and an ABC differ is that the latter isn't overseen by a court.

That's where Ken Eiler, a Portland attorney, comes in. He's taken on handling the dealership's ABC. His job is to turn its assets into money, get claims from creditors and give the money to them. Under the ABC, he would also wrap up the dealership's business affairs.

On Dec. 10, there will an auction to sell the business' assets, primarily parts and accessories, Eiler said.

Send questions, comments or news tips to jbach@statesmanjournal.com or 503-399-6714. Follow him on Twitter @JonathanMBach.


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