Capital One Bank Urgent Time Sensitive material regarding Capital One Bank Lending practices to Small Business Melville, New York

My name is Adam XXXXXXX; I own and operate xxxxxxxxxxxxxxxxxx. We are an independent auto dealership located in Asbury Park, New Jersey (Neptune TWSP).

In light of the recent bail out' appropriation to Capital One, I felt obligated to share the details of my situation to help prevent Capital One Bank from similarly mistreating other qualified borrowers and to ensure Capital One Bank is held accountable for their actions.

Capital One Bank has wrongfully refused to honor a floor plan financing agreement that was renewed and signed on July 1, 2008 for a term of 1 year. Specifically, the Credit and Security Agreement (CSA) entered into in this matter provides for a (1) one year term, which was not scheduled to expire until July 1, 2009, unless sooner terminated pursuant to a default. Their termination was expressly based on a business decision without relevance to any of the terms and conditions of the CSA. This is the type of corrupt, deceitful and greedy corporate behavior that I thought the government was trying to prevent.

On August 14, 2008 Capital One announced they would end financing of auto dealers' inventories (floor planning) in New Jersey and New York. They gave dealers a very unrealistic time frame, 45 days to find another bank. Oddly they said they would continue to finance dealers in Texas and Louisiana.

If they are breaking month old contracts to existing creditworthy customers with a proven track record of servicing debt for 6.5 years, you can bet they certainly aren't making new loans to qualified borrowers. The government's plan to inject money to encourage lending is not achieving the desired results, quite the opposite.

My company has been in business for 6.5 years. In the last 3 years alone my company has collected $1,500,000 from consumers in sales tax for our government and community. We have sold over 5,000 vehicles totaling $60,000,000 in that time frame (some deals we sold out of state and we paid other states sales tax).

Five month ago we employed 32 people, now we are down to just 10. Eighteen months ago we consolidated 2 locations in Tinton Falls relocated to a larger better equipped facility on Asbury Avenue. After massive renovations and $400,000 later we resurrected the former Cadillac building into a new landmark in Monmouth County (once owned by the Rockefellers' from the 1950's).

We have enjoyed a 6.5 year relationship with Capital One Bank (through 3 bank mergers without interruption). Throughout our entire 6.5 years we had a very successful relationship together with a flawless track record of responsibility and on time payments. We have (and still maintain) perfect credit, both personally and professionally.

As an owner and creator, with tremendous pride and ethics, I have also been faced with many difficult business decisions over our 6.5 year history. That being said, I can respect and appreciate any business decision that a company makes if they feel it's in their best interest.

The irresponsibility of Capital One, however, is not just unfair and unethical..but their actions are severely damaging consumers and small business' ability to borrow with complete disregard for the governments bail out plan.

If they wanted to end our relationship and get out of the floor plan business that's their decision...I could accept it and move on. Conversely, I'd expect Capital One Bank, as a hugely successful business to honor their decision to renew my 1 year CSA (Credit and Security Agreement) that was signed on July 1, 2008.

When I was told by Capital One's representative Rich Antanacii only a month after resigning a 1 year agreement I was shocked to say the least. At the time I didn't fully appreciate the magnitude of his wrong doing. The CSA was not terminable at will. It can only be terminated upon the expiration of its term (i.e. on July 1, 2009) or upon the event of a default. Incredibly, Rich Antanacii unilaterally terminated the CSA by his letter dated August 14, 2008. This letter was not based upon a default; none existed for this to happen.

Stated bluntly, IT'S ABSURD AND ACTIONABLE!!

In addition to Capital One's wrongfully inducing me into signing the CSA on July 1, 2008, Capital One also forced me to close a floor plan line maintained separately with Manheim Financial Services. In doing so, only 13 months earlier reflects Capital One's complete disregard for my company's business interest. Manheim has since informed me that re-opening my account with them is no longer an option.

Needless to say finding another lender in the current environment is also impossible. The inability to secure another floor plan lender has had a devastating mental and financial impact on our company and if someone doesn't step in immediately it will most likely result in Sports and Imports closing its doors with even more job loss.
To add injury to insult, I learned that on December 4, 2008 Capital One definitively announced that will acquire Chevy Chase Bank in MD. Under the agreement, Capital One will purchase Chevy Chase for $445 million in cash and 2.56 million Capital One shares.

So, Capital One gets $3.56 billion in bailout money and buys a bank for $520 million. Without looking at a financial statement or being an analyst I think it's pretty clear one of two things are going on: either Capital One used our hard earned tax dollars to fund this acquisition or they used their own money in which case why would the government give them our money?
I don't see any benefit to our economy; consolidation usually doesn't create jobs it ends them.

After reading about the acquisition and being faced with an imminent collapse of my own company it became clearit seems to be a pattern for Capital One. They intentionally are mis-leading the government (or at least the public) by borrowing money to fund an acquisition much like they mislead me in signing a 1 year agreement on July 1, 2008. By the admissions of Capital Ones own employees..past and present.I recently learnedcontrary to what they had been telling, they had no intentions of staying in the floor plan business and haven't for a very long time. Yet they signed a 1 year contract in July and canceled it a month later for no other reason other than a business decision.

One can't help but wonder if it's just coincidence that Capital One is Virginia based company and also able to get away with company murder?

I don't understand how lending a hugely profitable and cash rich company $3.56 billion help our financial crisis when they turn around less than a month later and spend a huge chunk of it to buy another company that will most likely result in more job loss and certainly no job creation. The $3.56 billion cash infusion did not encourage them to start lending again what so ever. In fact, it accomplished just the opposite by giving them even more power to abuse.

Additionally, on December 17, 2008 NJ, Governor Jon S. Corzine signed legislation creating the New Jersey Main Street Business Assistance Program, the latest in a series of initiatives established under his Economic Assistance and Recovery Plan to help the citizens and businesses of the Garden State weather the national economic downturn. The program was designed to enable qualified small and mid-size firms and nonprofit organizations in New Jersey to access capital by providing State support for bank lending through loan participations and credit enhancements.

Developed in partnership with the departments of Banking and Insurance and Treasury and the state's banking community, the Main Street Business Assistance Program will be funded by a $50-million State appropriation and administered by the New Jersey Economic Development Authority (EDA).

As soon as I read the news I called my representative at NJEDA to reiterate my need for help. As I learned from my conversations with them 3 months ago, loans still need to originate and be approved at one of the EDA's 13 preferred lending institutions. Wouldn't you know Capital One is a preferred lender? When I attempted to reach out to some of the preferred lenders, including Capital One, I was told the same thing I heard three months ago, right now they aren't doing anything.

Capital One's wrongful termination of our CSA should be enforced and they should be held liable for the damages they have caused. At the very least, someone should stop them from wrongfully and arbitrarily ending other creditworthy borrower relationships, while allowing Capital One's CEO, Richard Fairbanks and his crew to walk away with hundreds of millions.
According to Fortune 500's annual ranking for 2008, Capital One Financial is the seventh largest commercial bank in the U.S. and the 130th largest overall U.S. Corporation. (that was before their latest acquisition) A bank of that size, with the help of a $3.56 billion dollar infusion from the government, could do a lot of good. Unfortunately, no good has come of it.

One can't help but wonder, what's in Richard Fairbanks Wallet? Your family's money? It seems Richard Fairbanks and his army thinks they can take what they want, when they want, from whomever they want without consequence. Maybe that's why Fairbanks has been in the top 5 the highest compensated CEO's for the last 5 years earning over half of a BILLION DOLLARS!!!
I believe in free markets too which is why I went in business for myself. However, unlike Capital One, I honor my commitments and obligations. Does earning a multi-million dollar a year paycheck require taking advantage of the very people that helped get you there just because you can?

Having said that, I am smart enough to know I don't stand a chance against them in court, and I sincerely hope someone else's intervention might. In the mean time, I stand defenseless against Capital One's soldiers as their lies and games force me to default and ruin my reputation and credit (780 fico).

I have spent the last 6.5 years building.working day and night and day.sacrificing valuable time that could have been spent with my wife and son. I will not rollover and let them hurt others without, at least, attempting to seek justice.

Feel free to take a look at my site for a better appreciation of just how passionate we are about our business www.sportsandimports.us .

Regards,

Adam
asbury park, New Jersey
U.S.A.

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