Moncrief Dealership Woes Lead to Lawsuits

Sidney Moncrief, the former NBA and University of Arkansas at Fayetteville standout, is at the center of several lawsuits involving his former Hyundai dealerships in Oklahoma and Pine Bluff.

Court records filed in various counties and states don’t shed any light on what might have caused Moncrief’s trail of collection lawsuits.

Moncrief didn’t return a message left with his attorney, Justin Allen of Little Rock.

Allen declined to comment.

The first signs of financial trouble appeared last summer when Moncrief’s Oklahoma dealership — which closed in April 2004, less than a year after it opened — was hit with more than $100,000 in judgments for failing to pay former employees and an advertising bill.

Earlier this year, two Little Rock businessmen sued Moncrief in a dispute arising from the sale — for $500,000 — of his Pine Bluff Hyundai dealership. They said the 6-foot-4-inch Moncrief interfered with their business.

Moncrief shot back in court papers filed April 1. He countersued the businessmen, John McKay Jr. and David Ashley, saying they owed him more than $640,000.

Moncrief also had a lien filed against him in December for not paying his Arkansas income taxes for 2001 and 2002, which totaled $767, according to a document filed in Pulaski County Circuit Court. Moncrief apparently paid

the bill and the lien filed by the Arkansas Department of Finance & Administration was released on Jan. 15.

“(Moncrief’s) a deadbeat, there’s no doubt about that,” said Michael Gassaway, an attorney in Oklahoma City, Okla., who is representing Moncrief’s former salesmen who weren’t paid.

The Oklahoma Department of Labor issued judgments against Moncrief and his business, Pro Automotive II LLC, in 2004 totaling $67,347 for not paying employees’ wages. The judgments also include $33,321 for damages and $705 in penalties.

Trey Davis, a spokesman for the agency, said when Moncrief didn’t answer the eight employees’ claims for back wages, the department issued default judgments.

Gassaway said, “We have been trying to track him down and find any source of funds to collect these judgments, and that’s what we’re in the process of doing.”

Growing Up

Moncrief grew up in a Little Rock housing project and attended the UA on a basketball scholarship in 1975. For Moncrief’s senior year, he was named an All-American for shooting .606 from the field.

The Milwaukee Bucks drafted Moncrief in 1979 and Moncrief picked up several awards during his 11 seasons including twice being named Defensive Player of the Year and making five trips to the All-Star game.

According to the NBA’s Web site, one of his former coaches, Don Nelson, said Moncrief’s “mental toughness is about as strong as anyone I’ve ever been around. And I’ve known a lot of players.”

By the time Moncrief’s playing days ended in the early 1990s, Moncrief had opened his first car dealership and sold Pontiacs, Buicks and GMC trucks in Sherwood.

Moncrief sold that dealership for an undisclosed sum in 1999 to Carl Reed, who had been in the automobile business for more than a decade.

Moncrief wasn’t out of the car dealership business for long. In 2001, he struck a deal with Hyundai Motor America of Fountain Valley, Calif., to buy the Hyundai dealership in Pine Bluff.

“We have great respect for him as a businessman,” a Hyundai spokesman said in 2001.

Also in 2001, Moncrief tried to buy a DaimlerChrysler dealership in Pine Bluff that was located next to his Hyundai lot.

Moncrief had signed a letter of intent with William Russell, owner of the dealership that operated under the name Pine Bluff Motor Co. Moncrief also deposited $25,000 with Russell’s attorney, James Hyden of Little Rock, for the dealership, according to Moncrief’s lawsuit filed in Jefferson County Circuit Court in July 2001. The $25,000 would have gone toward the purchase price, which was $538,500 plus the value of the inventory at the time of the sale. But if the deal fell apart, Moncrief would get the deposit back, he said in his lawsuit.

Moncrief’s application to Daimler-Chrysler Corp. of Auburn Hills, Mich., was rejected.

“The information we received in-dicated a shortage of working capital of $482,600,” Ron Igielinski, dealer placement manager from Daimler-Chrys-ler said in a May 1, 2001, letter to Mon-crief. “We would be unable to recommend approval of your package with this amount of short fall.”

But when Moncrief asked for his deposit back, Russell’s attorney wouldn’t release it, according to Moncrief’s lawsuit.

Moncrief filed a lawsuit in July 2001 seeking the $25,000 plus other unspecified damages. Pine Bluff Motor Co. then filed a countersuit against Mon-crief, saying he failed to perform under his letter of intent.

The case was settled out of court in 2002.

Oklahoma

Moncrief opened Moncrief Hyundai of Edmond, Okla., in June 2003.

Jimmy Gateley, the former Internet sales manager at the dealership, said when Moncrief came to Oklahoma he was considering buying five dealerships, but only three were offered. Ultimately Moncrief ended up buying only the dealership in Edmond.

Within months of its opening, former employees started filing claims with the Oklahoma Department of Labor charging that they weren’t being paid, according to Department of Labor records.

Gateley said he worked at the dealership from August 2003 until December 2003, and is owed more than $4,000 in back pay.

At first, Moncrief was at the dealership two or three days every other week, Gateley said. Then his visits to the dealership dropped off. Soon bills at the dealership started going unpaid, Gateley said.

Moncrief’s dealership started missing payments for advertisements in The Oklahoman in December 2003, according to the paper’s lawsuit filed in Oklahoma County District Court. The paper said it is owed $41,576. It received a judgment against Moncrief’s dealership in July after the complaint went unanswered. The paper also has a claim against Moncrief individually for the amount.

Moncrief finally answered the lawsuit on Aug. 6 and denied that he owed the money.

The case is scheduled for trial in June.

A spokesman for Hyundai Motor America told the Associated Press last July that it would be looking into the business practices at the dealership. The spokesman said when the dealership closed a year ago, Moncrief had not violated the franchise agreement.

Rosemary Mc-Donald, Hyundai Motor’s senior counsel, said last week that she wasn’t aware of any investigation into the dealership.

Pine Bluff Sale

While Moncrief’s Oklahoma dealership was sputtering along, his Pine Bluff dealership, Sidney Moncrief Hyundai, also was having problems.

“This Hyundai dealership has been experiencing financial difficulties over at least the previous six months or more prior to [September 2004],” the new owners of the dealership, McKay and Ashley, said in the lawsuit they filed against Moncrief in February. “Public knowledge of these difficulties has had a tremendous negative impact on both employees and customers of the dealership.”

McKay and Ashley didn’t return calls for comment. Their attorney, Robert Donovan of Marianna, declined to comment on the case.

McKay and Ashley had signed a letter of intent to buy the Pine Bluff dealership for $500,000 on Sept. 15. They formed McKay Hyundai LLC to operate the business. McKay and Ashley agreed to run the dealership and pay Moncrief $5,000 a month as a management fee for six months. The sale hinged on McKay and Ashley receiving approval from Hyundai’s corporate office to operate the franchise.

On Jan. 3, Hyundai gave McKay and Ashley the green light to be an authorized Hyundai dealer.

But then the sale turned ugly.

On Jan.10, a week after Hyundai had given the approval, Moncrief’s attorney Marva Davis of Little Rock accused the two buyers of spending money that belonged to Moncrief.

“No more of the funds due to Mr. Moncrief are to be expended for any reason without written authorization,” Davis wrote.

Davis then fired off a letter to Hyundai officials on Jan. 25 accusing McKay and Ashley of failing to meet the terms of the asset purchase agreement.

“At this point, Mr. Moncrief has no realistic expectation that Mr. McKay’s company will fulfill its obligations under the [Asset Purchase] Agreement and feels that he has no choice but to place the dealership back on the market,” Davis said in the letter.

On Feb. 17, McKay and Ashley sued Moncrief saying he was interfering with their business.

“Just as the business has been stabilized and employee/customer confidence has been restored during the Sept.15, 2004 through Dec.31, 2004 ‘McKay’ management period, an announcement by ‘Moncrief’ that the dealership is ‘back’ on the market has a devastating effect on the value and the continuing success of the business,” McKay and Ashley said in the lawsuit.

McKay and Ashley also infused the dealership with more than $800,000 in the form of working capital.

They were seeking more than $75,000 in damages.

Moncrief denied the allegations and filed a counterclaim against McKay and Ashley accusing them of breach of contract.

Moncrief said McKay and Ashley were supposed to have paid $200,000 of the $500,000 purchase price to Simmons Bank. But the bank hasn’t been paid, he said.

Moncrief said McKay and Ashley owe him more than $641,252 including $441,252 that is owed to him and $200,000 that is owed to Simmons. He is suing for that amount plus other damages.

In the meantime, McKay and Ashley are operating the Pine Bluff dealership as McKay Hyundai.